Key Points

• President Trump’s megabill kept the corporate tax rate at 21% and allows companies to deduct domestic research and development spending immediately.

• Nvidia GPUs are the gold standard in AI infrastructure, and the company should benefit as autonomous robots and self-driving cars become more prevalent.

• Meta Platforms is leaning on AI to boost engagement across its social media properties, and it recently introduced advertising on Threads and WhatsApp.

• 10 stocks we like better than Nvidia ›

President Donald Trump signed the One Big Beautiful Bill Act into law on July 4. The legislation is nearly 900 pages and includes a litany of provisions, but two in particular should benefit Nvidia (NASDAQ: NVDA) and Meta Platforms (NASDAQ: META).

• The bill made permanent the corporate income tax rate of 21% that had previously been a temporary level set as part of the 2017 Tax Cuts and Jobs Act (TCJA). Because the corporate tax rate will not return to its pre-TCJA level of 35%, companies won’t face downward pressure on their profit margins from higher taxes, so Nvidia and Meta should be able to keep heavily repurchasing their shares. Only two companies in the S&P 500 spent more on buybacks in the last 12 months.
• The bill repealed the rule requiring mandatory amortization of domestic research and development (R&D) spending, which means companies can immediately deduct those costs from their taxable income rather than gradually writing them off. So the tech giants’ aggressive investments in artificial intelligence (AI) product development will result in faster tax savings.

My reasoning as to why Nvidia and Meta Platforms will benefit from Trump’s megabill could be applied to several other companies as well. For instance, Apple and Alphabet spent more than those two on stock buybacks in the last 12 months. Nevertheless, I think Nvidia and Meta look like particularly compelling long-term investment ideas now.

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1. Nvidia

Nvidia reported solid results for its fiscal 2026 second quarter, beating estimates on the top and bottom lines. Sales rose 56% to $46.7 billion in the period, which ended July 27, due to particularly strong growth in its data center and automotive segments, and non-GAAP earnings increased 54% to $1.05 per diluted share. CEO Jensen Huang noted extraordinary demand for the new Blackwell GPU, which he described as the platform at the center of the artificial intelligence (AI) race.

Nvidia’s hardware is likely to maintain its status as the gold standard in AI infrastructure as physical AI technologies like autonomous robots and self-driving vehicles become more common. The company not only designs data center GPUs and on-device processors to run AI workloads, but also provides pretrained models and software tools to streamline the AI development process.

“We build technology that almost every self-driving car company uses,” Huang told attendees at the company’s GTC conference earlier this year. For instance, Tesla uses Nvidia GPUs to train AI models for its full self-driving software. Alphabet’s Waymo and Amazon‘s Zoox use Nvidia hardware and software to train models in data centers, and also to power decision-making in robotaxis.

Another reason Nvidia stock could soar under Trump is his recent decision to reverse the export restrictions that prevented the company from selling its H20 GPU to buyers in China. The H20, built on the company’s last-generation Hopper architecture, is a less powerful variant of its popular H100. Trump has also said he may allow Nvidia to sell a scaled-back version of its newer Blackwell GPUs in China. The company has already designed a chip (the B30A) that may fit the bill, according to Reuters. But Huang says getting approval from Trump will take time.

The consensus outlook among Wall Street analysts is that Nvidia’s earnings will increase by 34% annually over the next three years. That makes its current valuation of 58 times earnings look fair. Having said that, the semiconductor industry is notoriously cyclical, so investors who buy Nvidia stock today should be prepared to hold on through some volatility.

2. Meta Platforms

Meta Platforms reported impressive second-quarter financial results that exceeded estimates on the top and bottom lines. Revenue increased 22% to $47.5 billion, operating margin expanded by 5 percentage points, and GAAP earnings jumped by 38% to $7.14 per diluted share.

Investors have good reason to expect that momentum will continue. Meta Platforms is the second-largest ad tech company in the world as measured by revenue. Ad tech spending is projected to increase at 14% annually through 2030, and Malik Ahmed Khan at Morningstar earlier this year wrote, “Meta is a digital advertising juggernaut poised to increase its market share.”

Why? Its ecosystem includes Facebook, Instagram, and WhatsApp, three of the four most popular social media networks in terms of monthly active users. In total, Meta’s platforms draw more than 3 billion people daily, which affords the company a deep understanding of consumer tastes. That alone makes it a compelling advertising partner.

However, Meta is using artificial intelligence to improve the user experience and boost engagement across its social media platforms. CEO Mark Zuckerberg told analysts on the second-quarter earnings call that time spent on Facebook increased 5% and time spent on Instagram increased 6% due to the advancements the company had made in its underlying recommendation systems.

Additionally, Meta has hitherto untapped monetization opportunities. It recently introduced advertising on Threads (a social media platform similar to X) and WhatsApp. The company has yet to articulate a monetization strategy for Meta AI, but the generative AI application has more than 1 billion monthly active users and could be a meaningful source of revenue in the future.

Wall Street analysts expect Meta Platform’s earnings to increase at a 17% annualized rate over the next three years. That makes its current valuation of 27 times earnings look quite reasonable. Investors with a three- to five-year time horizon should feel comfortable opening a small position in this stock today.

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Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Nvidia, and Tesla. The Motley Fool has a disclosure policy.

The artificial-intelligence bubble has been propping up the stock market and the broader economy for a while now. What happens if it bursts?

That’s been the question circling Wall Street recently, as Big Tech companies face both unprecedented political pressures from the White House — and new doubts about all the money that’s pouring into AI investments.

This past week, AI darling Nvidia reported blockbuster financial results that beat analysts’ expectations. But investors weren’t impressed. Shares in the chip company dipped 4% in the two days since that report.

Nvidia is still the world’s most valuable company, and it alone makes up about 8% of the S&P 500. It and the other so-called “Magnificent Seven” tech companies are contributing both to real economic growth — by investing billions and billions of dollars in developing artificial intelligence — and to the stock markets that Americans rely on for their retirement investments and other savings.

The S&P 500 is up almost 10% and the tech-heavy Nasdaq is up over 11% since the start of the year. That surge comes despite mounting uncertainty over the performance of the wider U.S. economy, the long-term effects of President Trump’s sweeping tariffs, and the increased prices they are widely expected to cause for consumers.

The AI gold rush isn’t paying off yet

For businesses and investors, the promise of artificial intelligence has been a big economic bright spot amid all the other gloom. In this modern-day gold rush, Nvidia and its competitors are selling the picks and shovels: the semiconductors that many tech companies are using to develop AI systems and capabilities.

Those companies, in turn, are selling their AI products to all the non-tech companies that are prospecting for gold — that is, looking for ways that AI can make their operations cheaper or more efficient.

But very few have seen results yet. The vast majority — 95% — of companies that are experimenting with AI aren’t seeing any revenue from it, according to a new survey from MIT. The publication of its findings last week sent the Nasdaq into a days-long slump.

“Most companies are not getting the benefit [of investing in artificial intelligence], but they feel like they have to keep trying because of the magnitude of disruption that’s coming their way,” says Gil Luria, who covers tech companies as a managing director for D.A. Davidson.

What’s happening with Nvidia symbolizes a broader story

Despite beating analysts’ expectations, and turning a handy $26.4 billion profit in its second quarter, Nvidia’s latest quarterly results disappointed Wall Street.

Even outside of the AI bubble, Nvidia has become a nexus for the bigger issues facing U.S. businesses — including mounting concerns over the future of free-market capitalism, and how much control President Trump is trying to exert over private companies.

Nvidia has been in the headlines this month for the extraordinary deal Trump announced with the company: He says Nvidia has agreed to pay the U.S. government a cut of sales of a certain chip in China, in exchange for letting the company do business there. (Nvidia said this week that it has not sold any of that chip in China in the past quarter.)

Trump announced that deal just before his administration said it would take a 10% stake in Intel, and that it is considering seeking similar deals in other industries. Those extraordinary arrangements have raised alarm bells in corporate America about how the U.S. government is exerting more control over the free markets. Meanwhile, investors are also still waiting to see the full impact of Trump’s sweeping tariffs on the broader economy.

But Pam Hegarty, who invests in tech companies as a lead portfolio manager at BNP Paribas, says Wall Street seems to be getting used to the political chaos around some of the artificial-intelligence industry.

“The tariffs and export controls have definitely added a lot of uncertainty, particularly for the semiconductor sector. But investors are starting to absorb that uncertainty,” she says, adding that she’s still optimistic about the broader AI boom: “The overall opportunity is still out there.”

On our Comment pages, Sr. Helena Burns issues a robust call for a return to “old school” means of acquiring, developing and retaining knowledge in the age of AI.

Traditionalist though she might be in many ways, however, Sr. Burns’ appeal is not simply to revive the alliterative formula of Readin’, Writin’ and Arithmetic. Rather, she urges a return to the lost arts of using libraries, taking notes, listening to wiser heads, and above all using our own brains rather than relying on the post in the machine to explain the world. 

“We can rebuild a talking, thinking, literate, memorizing culture. But it’s a slow build. It always was, always will be, and it starts when you’re a kiddo. Children in school are now saying they don’t want to learn how to read and write because computers will do it for them. They don’t know that they’re surrendering their humanity,” she writes.

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The good news is that the much-rumoured surrender seems to be much further off than predicted in the recent frenzy over ChatGPT and its cohorts purportedly being thisclose to taking over the world and doing everything from producing perfect sour grapes to writing editorials. 

In facts, recent reports particularly in the financial press, suggest AI-mania is already plateauing, if not hitting a downward curve. That doesn’t mean it won’t still cause significant disruption in workplaces or in how we navigate the storm-tossed seas of daily life. It doesn’t mean we can simply shrug off the statistic Sr. Burns cites of a reported 47 per cent decline in neural engagement among those who relied on artificial intelligence to help complete an essay versus those who got ink under their fingernails. 

But as techno journalist Asa Fitch reported last week, Meta Platforms has delayed rollout of its next AI iteration, Llama 4 Behemoth, because of engineering failures to significantly improve the previous model. Open AI, meanwhile, overhyped its follow up ChatGPT 5 and saw it effectively flatline in the market.

Business leaders, already sceptical of security and privacy concerns with AI, have hardly been reassured by the “tendency of even the best AI models to occasionally hallucinate wrong answers,” Fitch writes.

More critically, many businesses looking at the allure of AI don’t yet know, in very practical terms, what it can do for their particular sector. We tend to forget that from the “future is now” advent of the Internet, it took the better part of a decade before society began to appreciate its ubiquitous uses.

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University of California, San Diego psychology professor Cory Miller points out there even more formidable barriers to broad AI adaptation. Not the least of such obstacles are the requirements for, as Miller says, “enormous hardware, constant access to vast training data, and unsustainable amounts of electrical power (emphasis added).”

How unsustainable? A human brain, Miller writes, “runs on 20 watts of power – less than a lightbulb.”

AI by contrast?

“To match the computational power of a single human brain, a leading AI system would require the same amount of energy that powers the entire city of Dallas. Let that sink in for a second. One lightbulb versus a city of 1.3 million people,” he says. 

The comparison is arithmetically sobering. It’s also ultimately a hallelujah chorus to the glory of creation that is humankind. We exist in a culture awash – it often seems perversely pridefully – in self-underestimation and outright denigration. Oh, to deploy Hamlet’s immortal phrase, what a piece of work is man.

Without question, evil lurks in our darker corners and threatens to beset our best and brightest achievements. But achieve we do as we collectively engage the unique phenomenal 20-watt light bulb brains that are the universal gift from God, our Sovereign Lord and Creator.

In another column in our Comment section, Mary Marrocco illuminates the dynamic of that gift and that engagement, quoting St. Athanasius’ observation that “when we forgot to look up to God, God came down to the low place we’d fixed our gaze on.”

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The outcome was the glorious rise of our Holy Mother the Church, whose cycle of liturgical years, year after year, reminds us of who we are, what we are, and to whom we truly belong.

There is not a shred of artificiality in the intelligence of the resulting library (biblio) of the Bible’s books, its Gospels, its Good News. There is only God’s Word, the most extraordinary conversation any child, any human being, could ever be invited to learn from