My 2 Favorite Stocks to Buy Right Now

With the market recently down 10% over a two-day period, it has opened up some buying opportunties. At the same time, investors might want to be a little cautious given the uncertainty over the effects that the Trump administration's on-again, off-again tariffs might have on the global economy.

Let's look at two of my favorite stocks to buy right now.

Amazon

As the leading e-commerce retailer in the world, Amazon (NASDAQ: AMZN) will no doubt be affected by tariffs. Even though the Trump administration paused some tariffs for 90 days on select countries Wednesday afternoon, it retained a 10% near-global tariff on all imported goods and it raised tariffs on China to 125% after China approved retaliatory tariffs on the U.S.

However, not all is dire for Amazon. The retailer has been facing some very stiff competition from cheap Chinese competitors such as Temu and Shein. In May, the Trump Administration will also close the "de minimus" loophole that these companies have used to avoid duties. The action is only for shipments coming from China and Hong Kong, but there is a push for it to be applied to all countries.

This will significantly raise the price of goods from these rivals that are directly shipped from Asia to U.S. customers. This should be good for Amazon.

The company also is becoming much more operationally efficient through the use of artificial intelligence (AI) to help plan better driver routes, tell customers in listings which items are frequently returned, and use AI-powered robots that can recognize damaged goods before they are shipped. The company's high-margin sponsored ad business has also been growing, and with higher prices from tariffs, third-party merchants on its platform might use these ads even more.

Amazon's most profitable business isn't e-commerce, it is its cloud computing segment, Amazon Web Services (AWS). In 2024, AWS accounted for 58% of the company's total operating income. It was also its fastest-growing business, with revenue increasing 19% both last quarter and in 2024.

The business benefits from customers looking to build out their own AI models and apps and run AI workloads through AWS. The company offers customers its own AI foundation models and other leading models that they can tweak through its Bedrock system. For customers who want even more control or to build their own AI models from scratch, Amazon also has its SageMaker platform.

AWS was feeling capacity constraints much of last year, which hindered growth. So management plans to invest $100 billion in AI data centers to grow its capacity.

The company has also developed its own custom AI chips through its Annapurna subsidiary for both AI training and inference. Custom chips lack the flexibility of graphics processing units (GPUs) like those from Nvidia, but they offer better performance and less energy consumption for the specific tasks for which they were designed. This gives Amazon a cost advantage.

Trading at a forward price-to-earnings ratio (P/E) of just over 27.5 based on this year's analyst estimates, Amazon's stock is at one of the cheapest valuations in its history. That makes this a great time to buy shares of this long-term winner.

Image source: Getty Images.

Philip Morris International

A bit more on the defensive side, Philip Morris International (NYSE: PM) is a great stock to own in this environment. The company currently doesn't sell cigarettes in the U.S., so it has far fewer tariff worries. It also doesn't make cigarettes or its Iqos heated tobacco device in the U.S., instead relying of local manufacturing.

However, it does manufacture its fast-growing tobacco-free nicotine pouch Zyn in the U.S., which is its primary market. Its main Zyn factory is in Owensboro, Kentucky, and is building a plant in Aurora, Colorado, to keep up with demand.

Zyn has been a huge growth driver for the company. It saw shipment volumes soar 46% last quarter and 53% for 2024, and forecasts volumes to grow by 34% to 41% in the U.S. in 2025.

Overall, Philip Morris benefits from modestly increasing demand for its traditional cigarettes, while having very strong pricing power. And it is seeing strong growth from its smokeless portfolio with Iqos and Zyn.

Best of all for the company, Zyn and Iqos both have much better unit economics than traditional combustible cigarettes. This helps Philip Morris to be a growth company in a defensive industry.

The company is also looking to introduce Iqos in the U.S. after buying back the rights from Altria Group. Given that it does not sell cigarettes in the U.S., any Iqos customers would be new ones for the company, meaning the unit economics would be even better since there would be no product cannibalization.

At a forward P/E of 21, the stock is reasonably valued given the unique combination of growth and defensiveness that Philip Morris International offers.

Should you invest $1,000 in Amazon right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Philip Morris International. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.