There’s a lot of economic uncertainty right now. As a result, the stock market’s taken a hit. As a long-term investor, I’ve been taking advantage of the market weakness and snapping up stocks for my retirement portfolio. Here’s a look at two S&P 500 stocks I’ve been buying aggressively.
A digital labour platform
Back in early April, I added software company Salesforce (NYSE: CRM) to my portfolio. Since then, I’ve bought several more tranches of shares, boosting my holding significantly.
The main reason I’ve invested here is the company’s artificial intelligence (AI) agents ‘Agentforce’. These are software programmes that can perform business tasks autonomously (eg answer customer queries).
I reckon the market for this ‘digital labour’ is going to balloon over the next decade. Salesforce CEO Marc Benioff believes the industry could be worth up to $12trn so there appears to be substantial long-term growth potential.
It’s worth pointing out that Salesforce isn’t the only company that’s developing AI agents. Others include Microsoft and ServiceNow.
Competition from rivals is obviously a risk. I think the market’s going to be big enough for multiple players however, and I was encouraged by ServiceNow’s recent Q1 results (it said it’s having success with its AI agents).
In terms of the valuation, Salesforce currently trades on a forward-looking price-to-earnings (P/E) ratio about 24. That strikes me as a very reasonable earnings multiple for a world-class software company.
I’m hoping the stock stays at current levels for a while so I can continue to build up my position at this valuation.
A self-driving car platform
I’ve also added to my position in the world’s largest ride-share platform Uber (NYSE: UBER) several times while markets have been under pressure.
This is another company with huge potential, in my view. Over time, the Uber app’s slowly evolving into a travel ‘super app’.
One thing I’m excited about is partnerships with self-driving car companies. In future, I reckon Uber will be the platform that a lot of these companies use to connect with passengers.
It’s worth noting that in April Uber announced a new partnership with Volkswagen to deploy Autonomous ID Buzz vehicles on its platform. Testing is expected to start late this year.
Another thing to like about this company is that it’s relatively recession-proof. Not only is its customer base a little more affluent but if people are laid off, they may turn to Uber for work, which could potentially increase the number of drivers and keep prices competitive for riders.
Currently, the P/E ratio here using the earnings forecast for next year is only 24. That strikes me as a steal.
There are plenty of risks, of course. These include regulatory intervention/fines, competition from Tesla, and lower advertising revenues in a recession. All things considered though, I’m very bullish on Uber.
