2025 has gotten off to a choppy start as some of the most valuable U.S.-based companies are dragging down the major stock market indexes. But getting caught up in short-term market movements is a mistake.
By focusing on companies with strong fundamentals that can deliver on expectations, you can filter out the noise and grow closer to reaching your financial goals.
Here's why four Motley Fool contributors think chip giants Nvidia (NVDA +3.40%) and Micron Technologies (MU 0.80%), travel services company Airbnb (ABNB +0.14%), biotech behemoth Vertex Pharmaceuticals (VRTX +0.08%), and high-yield dividend stock Enterprise Products Partners (EPD +1.20%) are worth buying in March.
Image source: Getty Images.
The sell-off in Nvidia stock is a buying opportunity
Daniel Foelber (Nvidia): Despite blow-out results and upbeat guidance, Nvidia's stock price fell 8.5% last Thursday after reporting fourth-quarter and full-year fiscal 2025 results.
The headline figures are nothing short of jaw-dropping. Revenue grew 114% compared to fiscal 2024. Data center revenue was up 16% compared to just one quarter ago, and overall revenue was up 12% versus Q3 fiscal 2025. Gross margins for the quarter were 73% -- down three percentage points from Q4 fiscal 2024. But because revenue was so much higher, operating income grew 77%, and diluted earnings per share (EPS) jumped 82%.
For Q1 fiscal 2026, Nvidia is guiding for $43 billion in revenue, which would be a 65.4% increase from Q1 fiscal 2025. However, gross margins are expected to fall from 78.4% to 70.6%.
NASDAQ: NVDA
Key Data Points
Perhaps Nvidia sold off because investors were pricing the stock for perfection or getting too caught up in margin deterioration. But those factors aren't the main focus for long-term investors.
Nvidia continues to grow at a torrid rate when many other megacap, tech-focused companies are seeing growth pullback or are spending record amounts on capital expenditures to try and keep up in the artificial intelligence (AI) race. The longer Nvidia's stock price languishes while its earnings continue to grow, the cheaper its valuation will become.
Based on trailing earnings, Nvidia is more expensive than other megacap, tech-focused companies like Microsoft, Apple, and Amazon. But because Nvidia is growing so quickly, its forward price-to-earnings (P/E) ratio, which is based on analyst consensus estimates for the next year, is surprisingly lower than those three companies, as well as Tesla and fellow chip giant Broadcom.
Data by YCharts.
Now, the glass-half-empty outlook on Nvidia is that its gross margins are falling, and its growth rate is unsustainable if major customers like Amazon, Microsoft, Apple, and Meta Platforms pull back on spending, or if there's a cyclical downturn in the semiconductor industry.
At times like this, it's best to zoom out and focus on the big picture. If you believe in the sustained growth in AI investment and the need for more computing power, Nvidia stock looks like a great price at current levels. And even if you're skeptical, Nvidia's growth rate could be cut in half, and it would still be growing far faster than other megacap tech stocks.
Therefore, risk-tolerant folks may want to let Nvidia (the company) guide their investment thesis rather than getting too caught up in the price action of Nvidia (the stock).
A huge AI winner hiding in plain sight
Anders Bylund (Micron Technologies): You know what they say about market swings:
- Be fearful when everyone is greedy.
- Be greedy when everyone is fearful.
- Buy when there's blood in the streets.
In other words, the best time to invest tends to be when most people sell their stocks, bonds, or real estate parcels. Right now, there's a downswing going on in the stock market. This is not the time to sit back and watch from the sidelines but a great moment to take advantage of undervalued stocks.
One of my favorite stocks under these circumstances is Micron Technology. The memory chip maker faces a tremendous era of business growth as the AI boom plays out in the long run. ChatGPT's public release was just two years ago, and there will be a marketwide thirst for gigantic AI servers for years to come.
This is arguably just the start of a decades-long trend, comparable to the internet explosion in the 1990s or smartphones in the 2010s. Like phones and global networks, AI will be around for ages, and the generative AI tools you see today will be child's play next to the upcoming technologies.
These future AI systems will require a ton of processing power and boatloads of memory chips. As a leading provider of these chips, especially the high-bandwidth memory you see in high-end AI accelerators, Micron should enjoy game-changing growth in the coming years.
But nobody told Mr. Market.
Micron's stock has underperformed the S&P 500 (^GSPC +0.45%) market index over the last year and also since the ChatGPT release. This proven performer and future AI mogul is trading at just 8.4 times forward earnings estimates. That's a steal in my book. The Micron shares you buy today should deliver market-beating returns in 2025 and for the long haul.
Book this stock for the long term
Demitri Kalogeropoulos (Airbnb): It hasn't been a great few years for Airbnb investors. Owners of the room and home rental platform endured negative returns since the company's late 2020 initial public offering (IPO), while the wider market rallied over 60%. Yet the future looks much brighter for this innovative growth stock.
NASDAQ: ABNB
Key Data Points
Airbnb in mid-February revealed that sales growth accelerated to 12% in the fourth quarter from 10% in the previous quarter. It helped that the global travel industry expanded in the period, but Airbnb also got a lift from dozens of platform and service upgrades it launched in 2024. These improvements focused on making it easier for new hosts to list their homes and for guests to find the perfect Airbnb to book. Importantly, pricing was just a minor contributor to growth, while sales volumes made the biggest difference. "Affordability is in our DNA," CEO Brian Chesky said in a conference call with investors.
Chesky and his team have ambitious plans for the year ahead, starting with a massive product release in May that will include further platform upgrades to boost supply and demand. Airbnb is also launching new services, like a revamped experiences offering, that promise to extend its brand into other areas of the travel industry. In a shareholder letter, management said the company is at an "inflection point" where it can target these new revenue sources while still delivering on the core travel stay service.
It will be some time before these upgrades start contributing to sales and profit figures. But Airbnb is entering the spring season with a stellar financial position. Free cash flow improved to $4.5 billion last year, or 40% of sales. Operating profit margin was once again above 20% of sales, too. These wins show the power of Airbnb's asset-light selling model, which should only strengthen as it gains more scale in the massive global travel industry.
A big biotech company that's on a roll
Keith Speights (Vertex Pharmaceuticals): No matter how you look at it, Vertex Pharmaceuticals is on a roll. The big biotech company has won two key U.S. Food and Drug Administration (FDA) approvals since late December 2024. Its revenue jumped 16% year over year in the fourth quarter of 2024. Unsurprisingly, Vertex's share price has soared this year. I don't think the momentum for this high-flying biotech stock will end anytime soon.
NASDAQ: VRTX
Key Data Points
Vertex's first FDA approval in recent weeks was for Alyftrek in treating patients ages six and older with cystic fibrosis (CF). Alyftrek is dosed once per day, making its administration more convenient than Vertex's top-selling Trikafta. It's as effective as Trikafta in improving lung function and more effective at lowering the amount of chloride in CF patients' sweat. Vertex will pay lower royalties on Alyftrek than it has to pay on its other CF therapies. The company also plans to charge around 7% more for the drug than it does for Trikafta. All this points to increased revenue and profits for Vertex.
The second recent FDA approval was for Journavx in treating acute pain. Vertex's drug is the first non-opioid approved for alleviating pain in the U.S. in more than 20 years. The company's sales and marketing team hit the ground running after the FDA gave its thumbs up for Journavx. I expect the therapy will achieve tremendous commercial success.
There's more good news for Vertex, too. The company continues to ramp up the launch of Casgevy. Vertex believes its CRISPR gene-editing therapy has a multibillion-dollar opportunity as a one-time treatment for sickle cell disease and transfusion-dependent beta-thalassemia.
Vertex could have additional winners on the way. Its pipeline features four late-stage programs. The company is evaluating suzetrigine (Journavx) in a phase 3 study for treating diabetic peripheral neuropathy (pain associated with nerve damage caused by diabetes). Two late-stage candidates target kidney diseases -- inaxaplin with APOL1-mediated kidney disease and povetacicept with IgA nephropathy. Vertex even has a potential cure for severe type 1 diabetes in pivotal development with zimislecel.
Fear oil turmoil? This high-yield stock is for you
Neha Chamaria (Enterprise Products Partners): President Donald Trump is pro-oil and already going all out to bolster the U.S. oil and gas industry. Investors, however, should expect oil prices to remain volatile given the many geo-political factors at play, such as Trump's sanctions on Iran and the proposed oil tariffs on imports. Amid the uncertainty, buying a stock like Enterprise Products Partners could be a really smart move, as its contract-based midstream energy business can at least partly hedge your portfolio from nasty oil shocks while paying you big dividends along the way.
2025 should be a big year for Enterprise Products as it brings ongoing capital projects worth nearly $6 billion out of $7.6 billion online. While these projects should boost cash flows beginning this year, completing the bulk of its projects would also mean lower capital expenditures from 2026 onwards. That should further free up cash for Enterprise Products, and there's a lot it can do with it. Since the company already has a manageable debt profile, it could use the excess cash to reinvest in growth and further boost its dividends and share repurchases.
It's a win-win for shareholders -- higher cash flows should mean bigger dividends even if oil prices fall. Enterprise Products has one of the best dividend track records among the publicly listed oil and gas stocks in the U.S., having increased its dividend for over 25 consecutive years. With the company earning record net income and generating record distributable cash flows in 2024, it's a great time to buy this 6.4%-yielding stock.
