The stock market has been a bumpy ride in 2025. The S&P 500 (^GSPC 0.67%) rose 4% in the first two months before taking a 19% dive in the next six weeks. The index has recovered from that plunge and trades just above the year-end level again, but it has been an adventure to remember.
With volatility like this, it's no wonder many investors are staying away from the "buy" button. But there are some great buys available, even in the extra-volatile tech sector. If you have $5,000 to invest right now, this could be a great time to buy some Netflix (NFLX 1.20%) or Advanced Micro Devices (AMD -0.16%) shares -- for very different reasons.
Netflix stock is still worth a starring role in your portfolio
Netflix took a deep price cut in 2022, as investors worried about the company's new strategy and the inflation-burdened economy. It's often a bad sign when a high-growth business refocuses on a different set of business metrics, after all. You don't change a winning recipe, so there had to be something wrong when Netflix stepped away from maximizing subscriber additions in favor of "profitable growth" at that point. Right?
As it turns out, Netflix was just taking the next step in its long-term evolution. With media-streaming services taking over the media market, there's less room for high-octane subscriber growth in the largest and most lucrative markets. So it made sense to try some new ideas such as ad-supported subscriptions and live sports coverage while giving account-sharing families a couple of options.
If you grabbed some Netflix shares in that period of temporary cheapness, you could have gained as much as 667% by today, June 25 2025. Netflix has almost kept up with mighty Nvidia (NVDA 1.30%) over that period, which also happens to span most of the artificial intelligence (AI) boom. Both stocks left the S&P 500 far behind, despite historically strong returns in that index:
And the thing is, Netflix is still a great buy today. This is not the end of the rocket ride.
The stock has gained 43% year-to-date, and it looks expensive at first glance. Netflix shares trade at lofty valuation ratios, such as 60 times trailing earnings and 13.6 times sales. At the same time, Netflix is growing faster where it counts the most -- on the bottom line. Trailing twelve-month earnings have nearly doubled in three years, while free cash flows rose from breakeven to $7.4 billion.
So Netflix's sales got over the 2022 speed bump and are growing quickly again. Meanwhile, the company is converting a stellar 18.5% of those incoming revenues into cash profits.
I can go on, but you don't need to hear me gushing about Netflix. You get the point by now -- Netflix is a tremendous business and the soaring stock should still be able to rise much higher in the long run. This one is worth buying even when the shares aren't cheap.
Can AMD steal the AI scene from Nvidia?
Speaking of Nvidia, I'm intrigued by one of its chief rivals.
AMD shares have gained 19% in 2025, but only 76% over the last three years. Yes, that's barely ahead of the S&P 500's three-year gains and far behind Nvidia's 672% jump.
After waxing poetic about Netflix, I'll cut to the chase this time. AMD looks ready to steal market share from Nvidia in the all-important AI market.
The latest and upcoming versions of AMD's AI accelerator series are surprisingly competitive. Nvidia isn't winning every big-ticket contract just by showing up anymore. OpenAI CEO Sam Altman is impressed by the recently launched AMD Instinct MI350 and MI400 chips, calling them "an amazing thing" in a conference last week. The organization behind ChatGPT will use AMD's accelerators in the next generation of its AI back-end systems. These processors provide top-notch AI performance at a distinctly lower price point than Nvidia's Blackwell solutions. AMD's accelerators won't be the right tool for every job, but they will chip away at Nvidia's commanding lead.
Image source: Getty Images.
And that's not the whole story. Meta Platforms already uses the older MI300 chips in its Llama series of large language models, looking forward to doing more with the newer chips. IBM (IBM 0.12%) sees great value in running AI inference processes on AMD Instinct chips with Red Hat software.
The beat goes on. AMD has a long list of very excited large-scale AI customers these days, and this surge is already boosting its financial results. Data center revenues rose 57% year-over-year in the latest earnings report while AMD's earnings increased by 55%.
The company still looks small next to Nvidia's trillion-dollar market cap and six-fold advantage in top-line sales. But I expect the minnow to grow larger in the coming years. The best way to take advantage of AMD's blossoming business is to grab a few shares in 2025. AMD's stock should soar in the near future, as Wall Street wraps its collective head around the company's game-changing innovation.
