Motley Fool Stock Advisor, Motley Fool’s premier U.S. newsletter, has recently resumed its promotions regarding investment opportunities related to their “AI Disruption Playbook,” prompting readers to raise some questions.
The top US newsletter from Motley Fool, is once again generating interest among readers by promoting its “AI Disruption Playbook” investment opportunities. This renewed interest comes as it’s been about a year since we last examined a comparable teaser from them. Let’s take a look at these “AI Disruption Playbook” shares and see if their recommendations have changed.
For at least 5 years, Motley Fool positioned many of these shares as key picks under its “AI Disruption” theme. Based on available evidence, 2 of the 3 featured companies have remained unchanged since 2018. However, it’s unclear whether the “AI Disruption Guide” report has been regularly updated, as such exclusive reports are often broad enough to remain relevant for years. Previously, their recommended stocks included NVIDIA, Alphabet, Meta Platforms, though they now frequently highlight NVIDIA openly—likely because its dominance in AI has become widely recognized after years of rapid growth. The latest picks are:
- “The Quiet Powerhouse” = Alphabet
- “E-Commerce’s Hidden Force” = Amazon
- “The Digital Connector” = Meta Platforms
This selection is hardly surprising. All three companies are heavily invested in AI and have long integrated it into their core businesses. Additionally, Alphabet and Amazon benefit from companies leveraging their cloud services for AI training.
To Motley Fool’s credit, they have stuck with these stocks for years. Given their long-term investment approach, they rarely sell positions, and it’s well known that these technology leaders have been key drivers of the US stock market’s performance. Alongside Apple, Microsoft, they’ve played a major role in the S&P 500’s growth. In the last five years, all have outperformed the broader index—though none as significantly as NVIDIA, which remains in a league of its own.
While I’m unsure how things will turn present in the long run, I hold all of these stocks except META, which happens to be likely the second-best valued at the moment. However, I avoid META due to personal dislike of the company, even though they have a massive amount of personal data to power their AI systems. Each of these four companies, together with Microsoft, potentially Apple, are likely to remain AI leaders for the long run, as they possess massive data stores for training A.I., large customer networks for delivering A.I. products, and, crucially, abundant funds to make substantial investments in AI initiatives—allowing them to take risks and fail without jeopardizing their profitability.
For many of these shares, much of the A.I. potential is already priced in, given the massive benefits they’ve reaped from the AI boom in the last couple of years. NVIDIA, for example, is trading at a nearly unparalleled valuation for technology hardware firm. (with a P/S ratio of 30X and a P/E ratio of 60X), though its outstanding earnings growth and optimism regarding what lies ahead driven by strong demand for its Blackwell GPUs make it a wild card. No major business has ever been valued at such a valuation, but no company has posted this level of rapid profit expansion, either, making the future uncertain.
The other stocks aren’t growing as quickly as NVIDIA, but their valuations are more reasonable, even following a wave of AI.-driven price increases and strong operational results. Alphabet is currently the most affordable based on earnings, likely due to concerns about antitrust cases and its heavy investments in expanding data centers for AI. Despite these challenges, Alphabet remains an appealing core holding. You get exposure to AI growth, a leading force in advertising., the world’s largest video platform (YouTube , YouTubeTV), and a leading self-driving taxi initiative (Waymo). Alphabet also has a robust cash flow, a recently introduced dividend, and stock buybacks that offset Equity-based remuneration. Its P/E ratio is in line with the S&P500 average (~20-22X), making it a solid buy at a fair price. I’ve been holding Alphabet back to 2005. and recently increased my position in GOOGL after an extended period years.
