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Key Points

Nvidia continues to dominate its industry. Sandisk is thriving from the memory chips shortage. Amazon and Microsoft have thriving cloud computing units. 10 stocks we like better than Nvidia ›

There are several strong artificial intelligence (AI) stock picks available in the market right now. The AI infrastructure build-out is expected to last through at least 2030, so scooping up shares now with a long-term investing mindset is a smart way to approach the current market environment. These five in particular look like solid buys right now.

Image source: Getty Images.

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

Nvidia

Nvidia(NASDAQ: NVDA) has been the top AI stock pick since 2023 for a good reason: Its products sit at the core of the AI build-out. Nvidia makes GPUs (graphics processing units), which are the primary computing units deployed in data centers to handle AI workloads. Though it's already the world's largest company by market cap, Nvidia continues to see incredible growth, with its revenue rising 85% in its most recent quarter.

Its growth is far from over, given projections that annual data center capital expenditures will rise to the $3 trillion to $4 trillion range by 2030. That's a major, long-term investing opportunity. With Nvidia's chips likely to be at the center of that, it's well worth buying its shares now.

Sandisk

Because of the AI infrastructure build-out, demand for memory chips now far exceeds supply, and the companies that make those chips are profiting from the shortage. When the supply of any commodity lags behind rising demand, basic economics dictates that the commodity price will soar, and that's exactly why Sandisk (NASDAQ: SNDK) has done so well lately. It makes NAND memory for solid-state drives (SSDs) for long-term data storage in data centers. Its revenues and profits are undergoing monstrous growth, and even though the stock has risen by a tremendous amount over the past year, it doesn't appear to be stopping.

Wall Street analysts expect 336% growth during Q4 of its fiscal 2026 (which ends this month), and 122% in fiscal 2027. With the memory chip crunch expected to persist for years, that makes Sandisk a solid investment pick right now.

Microsoft

Microsoft(NASDAQ: MSFT) used to be one of the more popular investment options in the AI realm. However, the market has lost some faith in it, and the stock is down around 25% from its all-time high. Yet all that Microsoft has been doing is growing its two primary AI divisions.

Microsoft's annual recurring AI revenue (from products like Copilot) crossed $37 billion last quarter, up 123% year over year. Its cloud computing division, Azure, saw 40% revenue growth, reflecting the huge demand for AI computing resources. Microsoft looks like a bargain buy right now, and investors should scoop up shares of this proven winner before it returns to setting new all-time highs.

Meta Platforms

Meta Platforms(NASDAQ: META) is probably the biggest wildcard among the four AI hyperscalers. It doesn't rent out its computing capacity to others, as CEO Mark Zuckerberg claims it's using it all. So, all of its AI spending has gone into boosting its own capabilities, which has worked out well for it on the advertising front.

Meta Platforms operates the social media platforms Instagram, Facebook, Threads, and WhatsApp, and advertising on these platforms generates nearly all of Meta's revenue. Meta has used its AI investments to improve the effectiveness of its ad platform, which has led to solid 33% revenue growth. However, investors want more.

Meta is working on "more" with some products like AI glasses and a personal superintelligence model. If either of these two is a hit, Meta's stock could be primed for a major upside. Even if they don't pan out, Meta's ad business is still a solid reason to buy and hold the stock.

Amazon

Although many may focus on Amazon's (NASDAQ: AMZN) e-commerce business, as an investor, I prefer to look at its cloud computing unit, Amazon Web Services (AWS). AWS provides more than half of Amazon's operating profits, so it's one of its most important business units. In Q1, it grew revenue by 28% year over year -- its best pace in nearly four years. With demand for cloud computing capacity booming and Amazon spending $200 billion on data center capital expenditures this year alone, the growth rate for AWS will likely explode in the next few years.

Given that AWS' profit margins are substantially better than those of the e-commerce segment, this should lead to outsize growth on the bottom line, which is why I expect Amazon to be one of the best-performing stocks over the next few years.

Should you buy stock in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $438,283! Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,257,427!

Now, it’s worth noting Stock Advisor’s total average return is 938% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of June 12, 2026.

Keithen Drury has positions in Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Even a successful transformation into an AI-first world might not provide the kinds of margins that Oracle’s software business once delivered.

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Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE.

Microsoft (MSFT) is back in focus after a period of softer share performance, with the stock down about 4% over the past month and about 1% over the past 3 months, prompting fresh attention on its fundamentals.

See our latest analysis for Microsoft.

At a share price of US$390.34, Microsoft’s recent momentum has cooled, with the stock down over the past week, month, and year to date. However, the 3 year and 5 year total shareholder returns remain positive, underscoring how short term swings can differ from longer term outcomes.

If this pullback has you reassessing your tech exposure, it could be a useful moment to see what else is moving across 48 AI infrastructure stocks

So with the share price consolidating and Microsoft trading at what some models suggest is about a 30% intrinsic discount, is this pullback offering you an opening, or is the market already factoring in future growth?

Most Popular Narrative: 16.2% Undervalued

Against Microsoft’s last close of $390.34, the most followed narrative on Simply Wall St pegs fair value at $466, which points to a clear valuation gap.

In March I valued Microsoft at roughly $393 to $400 per share with a conservative discounted cash flow analysis. The Q3 print, the CapEx clarity, and the moat adjustments produce a different number now.

Base case fair value: $466 per share.

Read the complete narrative.

Want to see what sits behind that higher fair value? The narrative leans on cash generation, thick margins, and a detailed view of future earnings power. The full breakdown shows how those ingredients combine into that $466 figure.

Result: Fair Value of $466 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this story can shift quickly if regulators push harder on cloud licensing, or if Microsoft’s heavy AI and data center spending fails to earn strong returns.

Wall Street's queuing for one rocket. While SpaceX counts down to its IPO, other companies tied to the new space race are already in orbit. → 20 Compelling Space Companies watchlist · Global Space Race Investing Ideas screener · Scan the sector by valuation on Rocket Lab's valuation page.

Next Steps

If this mix of enthusiasm and concern around Microsoft feels familiar, treat it as a cue to move quickly, review the data, and carefully weigh the 5 key rewards and 1 important warning sign

Looking for more investment ideas?

Do not stop with one stock. Use this moment to scan other opportunities so you are not looking back later wishing you had checked.

Story Continues

Spot potential value by using the 46 high quality undervalued stocks to see companies where price and fundamentals tell a different story. Prioritise resilience with the 67 resilient stocks with low risk scores, which helps you focus on companies that score well on stability and financial strength. Hunt for less crowded ideas by scanning the screener containing 20 high quality undiscovered gems, which may not yet be on every investor’s radar.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include MSFT.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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June 12 (Reuters) - Microsoft is considering options for its ‌Xbox gaming unit, ‌including a potential spinoff or restructuring ​as a wholly owned subsidiary, The Information reported on Friday, citing three people ‌with direct ⁠knowledge of the discussions.

The Windows maker is ⁠also weighing options such as creating a joint ​venture with ​other ​partners as it ‌prepares to overhaul the unit, which could make the gaming business easier to sell, the report said.

While ‌no restructuring is ​imminent, all of ​the ​options remain on ‌the table, The Information ​reported.

Microsoft ​did not immediately respond to a Reuters request ​for ‌comment.

(Reporting by Juby Babu in ​Mexico City; Editing by ​Leroy Leo)

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Wall Street had one job Friday: watch Space Exploration Technologies (NASDAQ: SPCX) take off.

The Dow Jones Industrial Average (DJINDICES: ^DJI) rose 0.4% by noon ET, while the S&P 500 (SNPINDEX: ^GSPC) added 0.1%. The Nasdaq Composite (NASDAQINDEX: ^IXIC) index dipped 0.1%, weighed down by some familiar names making room for the new kid on the block.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

The indexes bounced around in the morning but never strayed far from flat. The real action was elsewhere. And even a new $2 trillion player rising 23% (as of this writing at 12:19 p.m. ET -- probably some other figure by the time you read this) wasn't able to lift a Nasdaq index dominated by titans in the $4 trillion club.^IXIC Chart

^IXIC data by YCharts

All eyes on SpaceX

Friday's Wall Street feels a lot like rocket-launch days at Cape Canaveral. Everything stood still, awaiting the majestic launch of a massive spaceship. None of the top indexes moved more than 1.2% in the morning, and they all trended back toward breakeven around noon.

SpaceX, for its part, delivered the drama. The official launch price was $135 per share, but trading opened at $168. That's a 22% jump, maxing out at a $2.2 trillion market cap. Elon Musk's combined space exploration and AI business is worth more than Walmart (NASDAQ: WMT) and Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) combined, roughly matching the gross domestic products of Canada or Brazil.

It's the largest public offering ever, and Friday's pop suggests investors wanted in even at that lofty price. And the SpaceX IPO shuffled how deep-pocketed investors allocate their funds today. Mega-caps Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) are down modestly on above-average trading volume, slicing $55 billion and $21 billion off their market caps, respectively. I can't prove this thesis, but I expect a significant portion of these tech titan investments simply moved over to SpaceX.

SpaceX's successful debut bodes well for OpenAI and Anthropic, both of which are expected to go public later this year. If investors will pay $2 trillion for rockets and Starlink, they'll probably show up for chatbots and AI security systems, too.

Iran deal: maybe, maybe not

It took me this long to get into today's geopolitics, because the SpaceX launch seems to have dampened everything else. Again, none of the major indexes is making a big move, and their top components neither soared nor crashed, either.

Story Continues

But there's still plenty of news to share from the Persian Gulf. Oil prices have bounced around today, with the United States Oil Fund (NYSEMKT: USO) currently down 2.1%. Some sources say that the Iranian conflict should end soon, though the Trump administration condemns Iran's recent drone strikes. Conflicting media reports make it difficult to guess what the final peace agreement will look like, or when it will be signed. But investors see hope in the ongoing talks, so oil prices are trending down.Image source: Getty Images.

Friday was SpaceX day and the normally headline-minting market indexes were more of an afterthought. The rotation out of Microsoft and Amazon is worth watching. If SpaceX's gain is just recycled Magnificent Seven money, the net effect on portfolios is a wash. If it's fresh capital entering the market, that's a different story.

SpaceX just proved that investors will show up for a $1.77 trillion debut and bid it even higher. OpenAI and Anthropic are taking notes.

Should you buy stock in Space Exploration Technologies right now?

Before you buy stock in Space Exploration Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Space Exploration Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $438,283! Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,257,427!

Now, it's worth noting Stock Advisor's total average return is 938% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of June 12, 2026.

Anders Bylund has positions in Amazon and Walmart. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, Microsoft, and Walmart. The Motley Fool has a disclosure policy.

Dow Jones Edges Higher While SpaceX Steals the Show With $2 Trillion Valuation was originally published by The Motley Fool

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CAs of midday, the S&P 500(SNPINDEX:^GSPC) rose 0.12% to 7,403.38, the Nasdaq Composite(NASDAQINDEX:^IXIC) dropped 0.36% to 25,716.64 as SpaceX’s (NASDAQ: SPCX) IPO kept risk appetite elevated in a volatile morning of trading. The IPO kept risk appetite elevated in a volatile morning of trading. The Dow Jones Industrial Average(DJINDICES:^DJI) climbed 0.38% to 51,040.07 as oil slid amid growing Iran peace deal hopes.

Market movers

Artificial intelligence (AI) infrastructure and cloud names had a volatile morning as the SpaceX IPO rocked the Nasdaq. At midday, the stock had surged almost 20% to $161.33 just hours after listing. Tech giants, Nvidia, Apple, Microsoft, and Broadcom all slipped as the mega-IPO pressured the market.

What this means for investors

The SpaceX IPO took center stage as the $75 billion offering entered the history books. Initial trading in the space-AI-communications firm showed strong demand, though some investors are skeptical that a loss-making company warrants such a high valuation.

This morning’s choppy trading could be a sign of things to come, say strategists at 22V Research. There are growing signs that conviction in mega tech stocks is fading, and that may lead to further sharp swings as investors rotate between tech and value stocks.

Oil prices dropped on growing expectations that the U.S. and Iran might reach a deal and reopen the Strait of Hormuz. WTI crude oil fell below $85 a barrel for the first time since mid-April. Improving U.S. consumer sentiment also boosted stocks: June data from the University of Michigan showed that easing gas prices had reduced some of the pressure on people’s wallets.

Should you buy stock in S&P 500 Index right now?

Before you buy stock in S&P 500 Index, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $438,283! Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,257,427!

Now, it’s worth noting Stock Advisor’s total average return is 938% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of June 12, 2026.

Emma Newbery has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple, Broadcom, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Quick Read

SpaceX's $1.8T debut tops Tesla (TSLA), putting Musk on the cusp of becoming the world's first trillionaire. SpaceX debuted at a richer multiple than Microsoft (MSFT) and Alphabet (GOOGL), with Starlink's 96% revenue surge to $7.6B driving the premium. SpaceX's $75B raise alone tops the combined $36B from every other 2026 IPO, and the book ran five times oversubscribed. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.

SpaceX just rewrote the IPO record book. The company sold more than 555 million shares at $135 each, raising $75 billion and landing a valuation of nearly $1.8 trillion. According to CNBC's Melissa Lee, that places SpaceX as the seventh most valuable U.S. company, ahead of Tesla (NASDAQ:TSLA), and pushes Elon Musk to the edge of a personal milestone no one has reached.Andrew Clemente

As Lee reported on the network this morning, "Musk is right on the cusp of becoming the world's first trillionaire. And that will depend on where SpaceX and Tesla shares settle when the market closes today."

The IPO That Overshadowed Every Other Listing

Demand for the offering was extraordinary. CNBC reported the book was about five times oversubscribed, with institutional whales leading the chase. BlackRock alone sought at least $5 billion worth of shares, according to the segment.

That crowding squeezed retail. Individual investors were slated to receive a share allocation in the low-20% range, below the roughly 30% allocation SpaceX had originally targeted. According to Yahoo Finance, the stock trades at $152.66 at 12:36 PM ET on June 12, well above the $135 price where the stock started the day trading.

For perspective on scale, SpaceX's $75 billion haul exceeds the combined $36 billion raised by 71 other IPOs so far in 2026. One CNBC host noted that "If we get another mega IPO this year like OpenAI or Anthropic, the total would likely skyrocket again."

How SpaceX Stacks Up Against America's Largest Companies

SpaceX's $1.8 trillion debut valuation now clears Tesla, which carries a $1.49 trillion market cap. Tesla shares were down 11.24% year-to-date through June 11, complicating the math on whether Musk becomes a trillionaire today.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.

Tesla's reported Q1 ties to SpaceX are also material to investors weighing the read-across. The automaker disclosed a $2 billion equity investment in SpaceX and a semiconductor fab partnership at Gigafactory Texas, giving TSLA holders a small but direct slice of the upside from the IPO.

Story Continues

Microsoft (NASDAQ:MSFT) sits at a $2.84 trillion market cap with an AI business at a $37 billion annualized run rate, while Alphabet (NASDAQ:GOOGL) carries a $4.44 trillion market cap and a trailing P/E around 28. SpaceX is debuting at a richer multiple than either, with much of the premium tied to Starlink's growth curve.

The Business Powering SpaceX's $1.8 Trillion Valuation

SpaceX's S-1 frames Starlink as the long-term margin engine. Connectivity revenue reached $7.6 billion in 2024, up 96.4% year over year, with income from operations of $2.0 billion. Consumer subscriber growth ran 96.5%, partly offset by an 8.1% decline in ARPU tied to international expansion.

That growth rides on a launch cost advantage rivals have not matched. Partial reusability has cut the cost per ton to orbit by roughly 85% versus the historical $18,500 per kilogram baseline, and Falcon 9 conducted 165 launches in 2025, more than half of global orbital activity. SpaceX has also invested over $15 billion in Starship, the lever for the next cost reset.

3 Things Investors Should Watch Next

Investors will have their eyes on three key topics. First, how SpaceX trades on Friday and next week. IPOs with books that are multiple times oversubscribed often see a strong initial pop, but early profit-taking from allocated investors can create volatility.

Second, investors will likely keep an eye on Tesla to see whether Elon Musk becomes the world's first trillionaire. Tesla remains a major part of Musk's net worth and reported Q1 FY2026 revenue of $22.39 billion and EPS of $0.41.

Finally, it will be interesting to watch the broader IPO market. SpaceX's blockbuster debut could encourage other high-profile private companies, including OpenAI and Anthropic, to pursue public listings. If they do, 2026 could go down as one of the biggest years for venture-backed IPOs in market history.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.

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Quick Read

MOAT returned 45% over five years versus ARKK's 33% loss, with a maximum drawdown of roughly 20% compared to ARKK's brutal 75% plunge. Tesla anchors ARKK with a beta of 1.8 and a trailing P/E of 371, an extreme volatility profile that drives the fund's wide outcome distributions and deep drawdowns. A 75% drawdown requires a 300% gain just to break even, making MOAT's narrower swings a crucial behavioral advantage that keeps investors from panic-selling. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and ARK Innovation ETF didn't make the cut. Grab the names FREE today.

Investors buy the ARK Innovation ETF (NYSEARCA:ARKK) when they want concentrated exposure to disruptive innovation: electric vehicles, genomics, fintech, autonomy, and AI. Cathie Wood's flagship has headlined the active-growth category for a decade, and it still commands a loyal base. The case for owning it holds. The case for owning something else alongside it, or instead, sharpens once you put the five-year scoreboard on the table.izzuanroslan / Shutterstock.com

Over the trailing five years, ARKK lost 33% on a total-return basis through June 11, 2026. The VanEck Morningstar Wide Moat ETF (NYSEARCA:MOAT) gained 45.06% over the same window, and banked that spread while taking far shallower drawdowns. The Buffett link is conceptual, not personal: Warren Buffett does not endorse MOAT, but its index runs the economic-moat framework Morningstar built from his philosophy.

What ARKK Is Built to Do

ARKK runs a concentrated, high-conviction book of companies Wood's team expects to ride generational technology shifts. Tesla (NASDAQ:TSLA) has anchored the fund for years, and it captures both the engine and the risk: a 1.798 beta and a trailing P/E of 371. Those holdings drive ARKK's signature pattern of wide outcome distributions, episodic rallies, and deep drawdowns in between.

That pattern costs holders. From its 2021 peak, ARKK plunged as much as 75% before clawing back, a round trip that left long-term owners with negative total returns. Its recent one-year return of 18.53% proves it can still rip when innovation names rerate. The longer arc is the problem.

The Mechanism Behind MOAT

MOAT tracks the Morningstar Wide Moat Focus Index, which flags companies Morningstar rates as having durable competitive advantages (network effects, switching costs, cost edges) and tilts toward those trading at the steepest discount to fair value. It charges 0.46%. The index buys quality compounders when prices are reasonable, Buffett's framework applied at scale.

Story Continues

The roster reads like industry leaders, not speculative bets. Fortinet anchors it at 4.18%, NXP Semiconductors holds 3.45%, and Masco takes 2.88%, alongside names like NVIDIA, Microsoft (MSFT), Kenvue, and Bristol-Myers Squibb. MOAT cycles them in and out on price relative to fair value.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and ARK Innovation ETF didn't make the cut. Grab the names FREE today.

The Volatility Side of the Comparison

The return gap grabs the headline; the volatility gap is what most ARKK holders underestimate. ARKK swings with a beta near 2, roughly twice the market, while MOAT tracks close to 1. That ratio is what "half the volatility" means. MOAT's five-year path held within a rough -20% to +45% band, while ARKK absorbed drawdowns of 25%, 33%, and as much as 75%. With the VIX elevated near the top of its past-year range, that smoother ride matters more.

The math punishes the swings. A 75% drawdown demands a 300% gain just to break even; a 25% drop needs only about 33%. Investors who sell in ARKK's deepest troughs lock in the loss. MOAT's narrower swings make it far easier to hold through a full cycle.

Where MOAT Lags

MOAT trails in a vertical innovation rally. When Tesla or ARKK's other speculative names run hard, ARKK beats MOAT by wide margins, and its 18.53% trailing-year return against MOAT's 12.18% shows it. The index also rebalances on a half-portfolio schedule, which churns turnover and can trigger short-term capital gain distributions. Because it targets quality at a reasonable price, MOAT lags when the market pays any price for growth and leads when discipline pays off.

How to Approach the Switch

In a tax-advantaged account, the swap runs clean: sell ARKK, buy MOAT, owe nothing. A taxable account changes the math. ARKK has dropped 33.27% over five years, so many long-term holders sit on losses, and realizing them to move into MOAT can harvest a usable tax loss, subject to wash-sale rules if you rebuild the position in similar form. Anyone who bought within the last year, with the fund up 18.53%, faces short-term gains instead.

Position sizing matters too. A partial swap, holding a small ARKK sleeve as an innovation call option while shifting the core to MOAT, keeps the upside of a rally and cuts the volatility. Where you draw the line depends on how much innovation exposure you want and how much drawdown you will stomach to keep it.

The Read

ARKK bets on a disruption narrative, and over five years it has trailed a diversified moat portfolio while inflicting far deeper drawdowns. MOAT runs the Buffett-style quality framework at index scale, screens for fair value, and has delivered the smoother ride the title promises. If ARKK anchors your growth exposure, MOAT gives you a more durable core built on quality and valuation discipline. If it rides as a small, deliberate satellite, keep it. The question that settles it: do you want exposure to one narrative, or compounded wealth across cycles?

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and ARK Innovation ETF didn't make the cut. Grab the names FREE today.

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After rallying from their lows this spring, software-as-a-service (SaaS) stocks once again have sold off in the latest tech pullback. With companies in the sector continuing to demonstrate that they are not getting disrupted by artificial intelligence (AI) and that it is likely more of a growth driver, now could be a good time to buy some top SaaS names on this dip.

Let's look at three SaaS stocks to consider buying right now.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

1. Palantir Technologies

After years of outperformance, Palantir Technologies(NASDAQ: PLTR) stock has struggled this year, losing a quarter of its value, and it has once again been caught in the tech downdraft.

Despite its stock performance, its operational performance has been nothing short of spectacular. Palantir's AI platform (AIP) has become like an AI operating system that makes AI more useful in real-world situations. The platform's strength lies in its ability to gather data from disparate sources and structure it into an ontology, linking it to physical assets and actual processes. This significantly reduces AI hallucinations and should become even more important as agentic AI emerges.

Palantir has been seeing breakneck growth, with revenue accelerating for 11 straight quarters. Last quarter, its revenue surged 85%, once again led by U.S. commercial customer growth of 133%. The company is both rapidly adding new customers and seeing existing customers aggressively expand, with its net revenue retention up an incredible 150% over the past 12 months.

While the stock is still not cheap, the company has the potential to become one of the most important AI companies in the world.

2. Microsoft

Not even Microsoft(NASDAQ: MSFT) has been spared from the SaaS sell-off this year, with its stock down more than 15% in 2026. Like Palantir, it has also been performing well operationally.

Growth has been led by its cloud computing unit, Azure, which saw revenue grow 40% last quarter. It was Azure's 11th straight quarter of 30% or more revenue growth. This strong growth should continue well into the future, with $627 billion in future cloud computing commitments in its backlog.

Given how ingrained Microsoft's solutions are in enterprises, the risk of AI disruption looks small, and instead, it looks like the company will be a key AI facilitator. In fact, the company's enterprise software business is also performing well, with revenue from Microsoft 365 commercial revenue climbing 19% last quarter. The growth is being driven by increased adoption of Microsoft 365 Copilot, with paid users surging 250% to 20 million.

Story Continues

With its stock now trading at a forward price-to-earnings (P/E) ratio of under 21 based on fiscal 2027 analyst estimates (ending June 2027), it looks cheap given its growth and opportunities ahead. Microsoft also owns 27% of OpenAI.Image source: Getty Images.

3. ServiceNow

With its platform acting as the central nervous system on which IT departments run their entire software stacks, ServiceNow(NYSE: NOW) is not only very unlikely to be disrupted by AI, but also to be a big beneficiary. The company's configuration management database (CMDB) is deeply embedded in its customers' workflow and data and is an irreplaceable system of record. This makes it an ideal platform to launch an agentic AI orchestration platform, which the company recently introduced.

ServiceNow has been seeing solid growth, with subscription revenue climbing 22% last quarter. Now Assist, its suite of AI solutions, has been seeing strong growth, with revenue up nearly 70% in Q1. However, it is the company's new agentic AI orchestration solution, AI Control Tower, that appears to have the most potential, given that AI agents are still in their early innings and organizations will need a platform to manage them.

Trading at a forward P/E of less than 22 times 2027 estimates, the stock is an attractive pick-up at these levels.

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SaaSpocalypse 2.0: 3 SaaS Stocks to Buy on the Latest Sell-Off was originally published by The Motley Fool

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Oracle ORCL shares took a sharp hit on June 11, 2026, tumbling between 8% and 10% in a single session following the release of fourth-quarter fiscal 2026 results the previous evening. Shares of Oracle have lost 2.3% in the past six-month period.

The stock, which closed at approximately $201 before the earnings announcement, slid toward the $180-$184 range as investors reacted negatively to the company's aggressive capital spending plans and a large equity fundraise that raised dilution concerns. The pullback dragged the stock further from its 52-week high of $345.72, though it remains above its 52-week low of $134.57. The selloff, coming despite a broad-based earnings beat, underscores a market that is increasingly scrutinizing the cost of Oracle's AI ambitions rather than celebrating the revenue momentum.

ORCL’s 6-Month PerformanceZacks Investment Research

Image Source: Zacks Investment Research

ORCL’s Q4 Results: A Beat With Caveats

Oracle posted record fourth-quarter total revenues of $19.2 billion, up 21% in USD, driven by record cloud revenues of $9.9 billion, up 47%. Within the cloud, infrastructure revenues surged 93% to $5.8 billion, while cloud applications grew 10% to $4.1 billion. GAAP EPS rose 21% to $1.45, and non-GAAP EPS climbed 24% to $2.11. For the full fiscal year, total revenues reached a record $67.4 billion, up 17%, with cloud revenues rising 39% to $34.0 billion. On the AI front, Oracle disclosed that the Oracle Multicloud AI Database grew 404% in the fiscal fourth quarter, making it the company's fastest-growing business ever.

Beyond revenues, Oracle reported a significant AI engagement milestone. Remaining Performance Obligations ended the quarter at $638 billion, up 363% year over year and $85 billion sequentially from the end of the fiscal third quarter. On the product side, Oracle's June 2026 OCI AI update highlighted new capabilities, including the addition of Cohere Rerank 4 and expanded multimodal support, as well as expanded OCI Enterprise AI availability in the UAE Central (Abu Dhabi) region, signaling continued geographic buildout of its cloud infrastructure.

Capex Overshoot and Negative Free Cash Flow Are Real Headwinds

The headline numbers, however, were overshadowed by a financial structure that alarmed investors. Oracle reported $23.7 billion in negative free cash flow for fiscal 2026, with capital expenditures jumping 162% to $55.7 billion — exceeding the company's own $50 billion projection for the year. In the fiscal fourth quarter alone, the company spent $15.9 billion on capital expenditures. Adding to investor unease, Oracle announced plans to raise approximately $40 billion through a combination of debt and equity financing in fiscal 2027, including a previously announced $20 billion at-the-market equity issuance. The prospect of meaningful share dilution, layered on top of already deeply negative free cash flow, is a near-term overhang that investors cannot easily dismiss.

Compounding the concern, management flagged during the earnings call that gross margins will step down due to the timing for the ramp-up of data center projects into their full revenue contribution. This signals that profitability pressure will linger into fiscal 2027 before the contracted backlog begins converting meaningfully into earnings.

Story Continues

Forward Guidance: Growth Intact Amid Execution Risk

Oracle's guidance for the first quarter of fiscal 2027 calls for total revenue growth of 27-29% and total cloud revenue growth of 57-63% in constant currency, with non-GAAP EPS of $1.72-$1.76. For the full fiscal year, Oracle confirmed prior revenue guidance of $90 billion and raised non-GAAP EPS guidance to $8.05, representing 18% growth. The $90 billion revenue target implies a significant step-up from the $67.4 billion reported in fiscal 2026 and meeting it will require flawless execution across data center ramp-ups, GPU procurement and customer delivery timelines. Oracle also confirmed plans to bring almost one gigawatt of computing power online in the current quarter — roughly equivalent to the total for all of fiscal 2026.

The Zacks Consensus Estimate for ORCL's fiscal 2027 earnings is pegged at $8 per share, marking an upward revision of 0.1% over the past 30 days. The earnings figure suggests 0.83% decline over the figure reported in fiscal 2026.

Oracle Corporation Price and ConsensusOracle Corporation Price and Consensus

Oracle Corporation price-consensus-chart | Oracle Corporation Quote

The $638 billion RPO is a genuine long-term catalyst. However, a significant portion of it involves large-scale AI contracts where customers prepaid for GPU purchases or supplied their own GPUs to Oracle, which alters the traditional economics of how that backlog translates into free cash flow and earnings per share. Investors eyeing a near-term re-rating will need to wait for evidence that the backlog converts cleanly.

Valuation and Competitive Landscape

From a valuation standpoint, ORCL stock is currently trading at a premium with a trailing 12-month Price/Earnings ratio of 31.05x, which is higher than the Zacks Computer - Software industry average of 24.37x. Oracle carries a Value Score of D.

ORCL’s Premium Valuation Raises ConcernZacks Investment Research

Image Source: Zacks Investment Research

Against this backdrop, Oracle faces intensifying competition from three hyperscalers who are simultaneously its cloud rivals and, in some cases, its infrastructure partners. Amazon AMZN is aggressively pursuing AI vertical integration through AWS, while Microsoft MSFT reported strong Azure momentum and confirmed capital expenditures of approximately $190 billion for 2026. Alphabet GOOGL-owned Google Cloud is pushing a full-stack AI approach built on custom TPUs, with Gemini Enterprise recording 40% quarter-over-quarter growth in paid monthly active users and processing more than 16 billion tokens per minute via direct API use. Amazon has expanded Bedrock with Titan Ultra 2, featuring a two-million-token context window, while Microsoft launched Azure Confidential AI with hardware-backed enclaves, reinforcing its position in regulated industries like finance and healthcare. Google Cloud's growing TPU-as-a-service offering, Amazon's recent $50 billion OpenAI commitment that expands AW' AI model access through Bedrock, and Microsoft Azure's deeply embedded Copilot ecosystem collectively represent formidable competition that could challenge Oracle's ability to win new workloads beyond its existing customer base.

Conclusion

Oracle's record fourth-quarter results confirm that the AI infrastructure opportunity is real and the demand is substantial. However, with deeply negative free cash flow, rising equity dilution, compressing near-term margins and an expensive valuation relative to peers, ORCL warrants a Hold stance for now. Investors should monitor how efficiently Oracle converts its record $638 billion backlog into sustainable earnings before adding exposure. ORCL stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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