But after generating a 26.3% gain in 2023, followed by a 26.9% boost in 2024, is the market momentum slowing? And could 2026 see yet another stock market correction, or even full blown crash?

Three warning signs vs three bull signs

According to institutional analysts, there are a variety of forces at work that could indeed trigger a market downturn. But three of the most prominent include:

1. Extreme market concentration – 34.4% of the entire S&P 500 is concentrated into just the Magnificent Seven stocks, with almost half of all earnings driven by a handful of tech giants.
2. A fragile labour market – US unemployment’s steadily creeping upwards, reaching a new four-year high of 4.6% in November, hiking the risk of a looming recession.
3. Elevated valuations – lofty share prices relative to earnings, particularly within sectors like artificial intelligence (AI), are raising the risk of volatility.

With these factors in mind, it isn’t so surprising to see some investors grow nervous. However, despite the rising pessimism, a crash or even a correction is by no means guaranteed. In fact, there are several reasons why the S&P 500 could continue to outperform next year:

1. Massive economic stimulus – new corporate and consumer tax cuts in 2026 are estimated to contribute $285bn of stimulus (roughly 1% of US GDP).
2. More interest rate cuts – continued downward adjustments to interest rates by the Federal Reserve could offset recession risks and stimulate stock prices higher.
3. AI productivity gains – tangible benefits of using AI tools are starting to emerge, with profit margins as a whole slowly starting to expand.

What now?

My strategy hasn’t changed. I’m avoiding popular overvalued stocks and focusing on finding under-the-radar opportunities. And one that I’ve recently added to my ISA is Cellebrite (NASDAQ:CLBT).

As a quick introduction, Cellebrite’s the world leader in mobile phone decryption technology. Its tools are used by almost all law enforcement agencies across the US and Europe for criminal and cybersecurity investigations. And 2026 could be a transformational year. Let me explain.

In 2024, management began the process of securing FedRAMP authorisation – a certification that allows Cellebrite to offer its cloud services to US federal agencies that have exceptionally rigorous security clearance requirements.

It’s not an easy certification to acquire, and there have been multiple delays. However, Cellebrite appears to be on track to finally receive the greenlight early next year. And current estimates suggest it could add anywhere between $50m and $150m to the group’s annual recurring revenue.

Considering total revenue in 2024 was $401m, that’s a massive growth catalyst potentially just around the corner.

Of course, it does introduce some significant risks. Federal customers already make up around 20% of the company’s revenue stream. And with FedRAMP, this concentration would likely increase even further, making Cellebrite vulnerable to future government spending cuts.

That’s a risk investors will need to consider carefully. But personally, given the near-term and long-term growth opportunities, it’s one I’ve decided to take with a small opening position of 2% of my growth portfolio. But it’s not the only US stock I’ve been snapping up.

The post Is the S&P 500 heading for a stock market crash? appeared first on The Motley Fool UK.

Alphabet

What it does: Alphabet is a global technology company best known for Google, YouTube, Android, and cloud services.

By Mark Hartley. When considering an AI investment for the long term, Google’s parent company Alphabet (NASDAQ: GOOG) stands out. It has emerged as a key player in the AI space, leveraging its vast data resources and computational power to dig deep roots into the industry. Through DeepMind and its Gemini AI models, Alphabet is at the forefront of generative AI development. Google Cloud offers scalable AI tools and infrastructure for businesses, while AI enhancements in products like Search, Gmail, and YouTube are well-positioned to benefit from advertising revenue. 

Alphabet’s expansive ecosystem gives it a strategic advantage in training and deploying AI models at scale.

A significant risk, however, lies in the potential disruption of its core search business. As AI chatbots and generative search become more prevalent, traditional search advertising could face margin pressure. Additionally, if faces increased regulatory scrutiny on data usage, antitrust concerns and competition from rivals like Microsoft and Amazon.

Mark Hartley doesn’t own shares in any of the stocks mentioned.

Cellebrite

What it does: Cellebrite is the global leader in decrypting mobile phones and other devices supporting digital forensic investigations.

By Zaven Boyrazian. Many AI stocks today are unproven. That’s why I prefer established players leveraging AI to improve their existing mission-critical products like Cellebrite (NASDAQ:CLBT).

Cellebrite specialises in extracting encrypted data from mobile phones and other devices aiding law enforcement and enterprises in criminal and cybersecurity investigations. Over 90% of crime commited today has a digital element. And when it comes to decrypting mobile phones, Cellebrite is the global gold standard.

The company is now leveraging AI to analyse encrypted data – drastically accelerating a task that’s historically been increadibly labour intensive identifying patterns, discovering connections, and establishing leads.

Most of Cellebrite’s revenue comes from law enforcement, exposing Cellebrite to the risk of budget cuts. In fact, fears of lower US federal spending is why the stock dropped sharply in early 2025. And with a premium valuation, investors can expect more volatility moving forward. But in the long run, Cellebrite has what it takes to be an AI winner in my mind. That’s why I’ve already bought shares.

Zaven Boyrazian owns shares in Cellebrite.

Dell Technologies

What it does: Dell Technologies provides a broad range of IT products and services and is an influential player in AI.

By Royston Wild. Dell Technologies (NYSE:DELL) isn’t one of the more fashionable names in the realm of artificial intelligence (AI). The good news is that this means it trades at a whopping discount to many of its peers.

For this financial year (to January 2026), City analysts think earnings will soar 41% year on year, leaving it on a price-to-earnings (P/E) multiple of 12.6 times. Such readings are as rare as hen’s teeth in the high-growth tech industry.

In addition, Dell shares also trade on a price-to-earnings growth (PEG) ratio of 0.3 for this year. Any reading below 1 implies a share is undervalued.

These modest readings fail to reflect the exceptional progress the company’s making in AI, in my opinion. Indeed, Dell last month raised guidance for the current quarter as it announced “unprecedented demand for our AI-optimised servers” during January-March.

It booked $12.1bn in AI orders in the last quarter alone, beating the entire total for the last financial year. Dell is a major supplier of server infrastructure that let Nvidia’s high-power chips do their thing.

Dell’s shares could sink if unfavourable developments in the ongoing tariff wars transpire. But the company’s low valuation could help limit the scale of any falls.

Royston Wild does not own shares in Dell or Nvidia.

Salesforce

What it does: Salesforce is a customer relationship management (CRM) software company that is developing AI agents. 

By Edward Sheldon, CFA. We’ve all seen the potential of artificial intelligence (AI) in recent years. Using apps like ChatGPT and Gemini, we can do a lot of amazing things today. These apps are just the start of the AI story, however. I expect the next chapter to be about AI agents – software programmes that can complete tasks autonomously and increase business productivity exponentially. 

One company that is active in this space is Salesforce (NYSE: CRM). It’s a CRM software company that has recently developed an agentic AI offering for businesses called ‘Agentforce’. It’s still early days here. But already the company is having a lot of success with this offering, having signed up 8,000 customers since the product’s launch last October. 

Now, Salesforce is not the only company developing AI agents. So, competition from rivals is a risk. I like the fact that the company’s software is already embedded in over 150,000 organisations worldwide though. This could potentially give it a major competitive advantage in the agentic AI race.  

Edward Sheldon has positions in Salesforce.

Salesforce

What it does: Salesforce is a cloud-based software company specialising in customer relationship management, helping businesses manage sales, marketing, support, and data.

By Ben McPoland. I think Salefsforce (NYSE: CRM) looks well set up to benefit in the age of AI. Specifically, its Agentforce platform, which lets businesses deploy AI agents to handle various tasks, could be the company’s next big growth engine. 

By the end of April, it had already closed over 8,000 deals, just six months after launching Agentforce. Half of those were paid deals, taking its combined data cloud and AI annual recurring revenue above $1bn.

Granted, that looks like small potatoes set against the $41.2bn in sales it’s expected to generate this fiscal year. But it’s still very early days, and management reckons the digital labour market opportunity could run into the trillions of dollars.

Of course, it’s always best to treat such mind-boggling projections with a healthy dose of scepticism. And the company does face stiff competition in the AI agent space, especially from Microsoft and ServiceNow.

Nevertheless, I’m bullish here. Salesforce is already deeply embedded in sales, service, and marketing. Its AI agents slot into existing workflows, which I think will prove to be a big advantage over unproven AI upstarts.

Ben McPoland owns shares of Salesforce. 

The post 5 AI stocks to consider buying and holding for the long term appeared first on The Motley Fool UK.

Its 2024 fourth-quarter earnings missed the mark, as did its subsequent 2025 first-quarter results. And while the miss was small, growth inventors tend to be quite unforgiving towards businesses trading at lofty valuations. So seeing a 36% pullback from its February highs isn’t a major surprise.

However, with the stock now trading at a cheaper price, could this be a buying opportunity?

Digging deeper

As a quick crash course, Cellebrite specialises in digital forensics. In the corporate world, this technology can be handy when investigating cybersecurity breaches. But for the most part, demand for Cellebrite’s technology actually comes from law enforcement agencies.

An estimated 90% of crime today has some sort of digital element. As such, requests to decrypt mobile phones and other electronic devices used to commit crimes are creating a significant backlog for investigators and prosecutors – a migraine-level problem that Cellebrite is helping solve.

Digging into the latest results, revenue growth continues to be explosive at 20% year-on-year, with annual recurring revenues climbing by 23% to $408m. And with a net retention rate of 121%, customers are clearly finding value in Cellebrite’s technology as they’re seemingly happy to ramp up spending each year.

Sadly, that just wasn’t enough to sate the appetite of growth investors who expected a little more top-line growth. And with management forecasting that sales might only grow by 17% for the full year of 2025, the stock endured a bit of a tumble.

A buying opportunity?

Even after its recent valuation hit, at a price-to-sales ratio of 8.8, Cellebrite shares can hardly be described as cheap. Yet projections from some analysts suggest that the premium might be worth paying. For example, JPMorgan currently has a share price target of $28 – around 70% higher than today’s price.

Such large 12-month projections should always be taken with a grain of salt. But Cellebrite’s target market is expected to grow at a near-15% annualised rate over the next five years. And given the company’s already the top dog in the sector, we might still be in the early days of Cellebrite’s growth story – even more so now that profits have started to materialise.

Having said that, there’s no denying the high risk here. Cellebrite’s technology is a powerful tool that can be easily abused if it gets into the wrong hands. This reputational risk is already being put to the test with reports of authoritarian regimes using the technology in human rights violations.

Management’s already tackling these issues with much stricter customer screening, disabling access when misuse is detected, as well as proactively suspending sales in over 60 countries. Nevertheless, ethical concerns will undoubtedly persist.

Despite this risk, I remain an optimist. The valuation’s still on the pricey side. But I think the premium might be worth paying, considering the opportunity that Cellebrite’s seeking to capitalise on. That’s why I’ve already used the recent stock price weakness to build a small position in my growth portfolio.

The post Down 36%, is this US growth stock about to surge again? appeared first on The Motley Fool UK.

Cellebrite

What it does: Cellebrite is a software-as-a-service enterprise specialising in digital forensics and encrypted data extraction.

By Zaven Boyrazian. In the world of law enforcement and cybersecurity, digital evidence has become a critical. In fact, an estimated 90% of reported crime today has some form of digital element. And with most criminal devices being locked or encrypted, demand for Cellebrite’s (NASDAQ:CLBT) C2C platform has surged.

The platform offers solutions for digital forensics, case & evidence management, and AI-powered analytics. And it is the global standard for extracting evidence from encrypted mobile phones, combating terrorism, fraud, human trafficking, and organised crime.

Revenue has been expanding at a 20% annualised rate over the last five years, with operating profits surging by an average of 44% annually on the back of rapidly expanding margins thanks to the increasingly lucrative opportunities within the digital forensics market.

Of course, such explosive returns invite challenge. And fierce competition is forcing Cellebrite to allocate considerable funds to research & development. If it can’t out-innovate its rivals, the group’s leading position could become compromised.

Nevertheless, given the explosive opportunity and long track record of defying expectations, this is a risk I’m willing to take.

Zaven Boyrazian owns shares in Cellebrite.

Devon Energy

What it does: Devon Energy is an oil and gas producer in the U.S. with a diversified multi-basin portfolio, including in the Delaware Basin.

By Andrew Mackie. I have been looking for an opportunity to enter the pure-play exploration space for some time. With the recent tariff-induced sell-off I took the opportunity to buy my favoured pick Devon Energy (NYSE: DVN).

Unlike oil majors such as BP and Shell, earnings come purely from oil and gas production. The company is effectively a leveraged play on such prices. Unsurprisingly, as prices have fallen for some time, so too as the share price. However, I remain extremely bullish on prices over the next decade plus.

In the short to medium term, I expect natural gas demand to rise significantly off the back of data centre growth. The recent conversion of a decommissioned coal-fired to natural gas power plant in Homer, Pennsylvania, provides a good illustration of demand growth. Unlike nuclear, gas fired power stations can come online very quickly.

Should the US enter a recession in 2025, then oil prices will undoubtedly fall even more, impacting Devon’s profitability. However, with globalisation unwinding, defence spending increasing and the US boosting domestic manufacturing, I expect hydrocarbon demand to remain buoyant well into the future.

Andrew Mackie owns shares in Devon Energy, BP and Shell.

Nu Holdings

What it does: Nu Holdings owns Nubank, which is Latin America’s largest digital bank.

By Ben McPoland. I recently added to my position in Nu Holdings (NYSE: NU). The Brazil-based digital bank ended the first quarter with nearly 119m customers, 19% more than the year before.

Incredibly, 59% of Brazil’s adult population are now customers, while strong growth continued in Mexico (12% of the adult population) and Colombia (8%). Quarterly revenue jumped 40% to $3.2bn on a currency-neutral basis, while adjusted net income rose 37% to $606.5m.

There were some negative currency swings in the quarter, which could continue. Also, the bank’s risk-adjusted net interest margin fell to 8.2%, down from 9.5%. This was largely due to aggressive expansion in Mexico and Colombia, which involves offering higher deposit rates to attract users. So the quarter wasn’t totally flawless.

Nevertheless, I’m very impressed with the way Nu continues to grow at scale. The neobank is barely scratching the surface when it comes to monetising its vast – and growing – base of customers.

The stock isn’t cheap, but the company appears to have a long runway of growth ahead of it, with large swathes of Latin America still either unbanked or underbanked.

Ben McPoland owns shares of Nu Holdings.

RWE

What it does: RWE AG is a leading German energy company focused on renewables, power generation, and trading.

By Mark Hartley. I recently invested in RWE (FRA: RWE) due to its strong financial performance and strategic plans for 2025. Last year, it reported an adjusted EBITDA of €5.7bn and adjusted net income of €2.3bn, surpassing expectations. The energy supplier also announced a €1.5bn share buyback program, reflecting a commitment to shareholder returns.

However, it faces some uncertainties in the US offshore wind market following revised policies that could affect renewable energy. As a result, it recently reduced its five-year investment outlook by €10bn, indicating caution amid these market challenges. This could impact future growth and returns, so I hope the US sees the advantages in renewables and reconsiders its policies.

Despite these risks, I remain optimistic about RWE’s focus on renewables and look forward to seeing it drive innovation in the sector. It also has a decent 3.42% yield and a P/E ratio of 4.65.

Mark Hartley owns shares in RWE.

The post 4 international stocks that Fools have been buying! appeared first on The Motley Fool UK.