S&P 500 Bull Run: 3 Stocks to Buy Now

Key Points

• The S&P 500 has zoomed higher from lows seen in April caused by President Donald Trump announcing extremely high tariff rates.

• There is still plenty of uncertainty ahead, with tariff rates not yet final and investors wondering if the economy will tip into a recession.

• Despite the big run, there are still plenty of opportunities in the broader benchmark S&P 500 index.

• 10 stocks we like better than Berkshire Hathaway ›

Volatility has been the name of the game this year. The broader benchmark S&P 500 index fell close to 20% and nearly into bear market territory from highs made in February, only to reverse course and go on a bull run. The S&P 500 is now up close to 24% from lows made in early April (as of July 6) after President Donald Trump announced sweeping tariff rates that were higher than the market expected.

The hope is that final tariff rates are manageable, inflation continues to decline without the economy tipping into a severe recession, and the Federal Reserve can resume cutting interest rates in September, although what happens next is still anyone's guess. Regardless, here are three stocks in the S&P 500 to buy now.

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Image source: Getty Images.

1. Berkshire Hathaway: The ultimate port in the storm

Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), the large conglomerate run by Warren Buffett, runs many businesses, including the Burlington Northern Santa Fe Railroad, a large energy business, one of the largest property and casualty insurance businesses in the U.S., a large mortgage business, and a massive stock portfolio worth roughly $296 billion. It's perhaps this diversity of businesses that led Berkshire's stock to outperform early this year, as investors viewed it as a flight to safety.

However, since the recent market rally, Berkshire's stock has struggled and is now up about 7.5% this year, compared to the S&P 500's roughly 7% increase. Buffett announced at Berkshire's annual meeting that he would be stepping down as CEO of the company at the end of 2025, although the 94-year-old plans to stay on as chairman of the board of directors. Considering Buffett is viewed by many as the greatest investor of all time, he likely carries a certain premium that may be dissipating from the stock in preparation for his stepping down.

Berkshire's valuation has now fallen below two times the company's tangible book value, or net worth, and is closer -- albeit still above -- the company's five-year average. Also, there is no safer port in the storm than Berkshire these days, which the company demonstrated earlier this year, widely outperforming the market during its most intense sell-off. Berkshire has a massive hoard of cash to ride out any choppy waters or take advantage of new opportunities. Incoming CEO Greg Abel and the rest of Berkshire's management team are more than capable and have been running large parts of the company for many years as Buffett has gotten older.

2. Alphabet (Google): The cheapest "Magnificent Seven" Stock

Whether due to regulatory issues or changes in the search space, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), the parent of Google, has been less than magnificent this year and has quickly become the cheapest "Magnificent Seven" stock by a fair margin, in terms of valuation.

GOOGL PE Ratio (Forward) data by YCharts

It's hard to believe that a company that owns YouTube, Google Chrome, Gmail, Google Cloud, and Waymo could be trading at less than 20 times earnings, but here we are. Alphabet does face challenges. The Department of Justice sued Google for monopolistic search practices, allegations that a federal judge sided with. In a worst-case scenario, Google might be forced to sell its popular Chrome browser.

But perhaps in an even more worrisome secular trend for Google, the search business faces real challenges from artificial intelligence chatbots like ChatGPT, which are some of the fastest-growing businesses of all time. Many believe these players can perform search better and have started using them for their search needs over traditional search engines like Google. In 2024, revenue from Alphabet's Google Search and Other segment made up 57% of total revenue, so obviously, that business is everything for the company.

That said, Google has been able to pick up traction with its AI summaries at the top of most search queries, which are powered by Gemini and populate answers based on information from available sources, not dissimilar from what chatbots are doing. Google also has many businesses with high-growth potential, including an AI chip business that some analysts think is not being reflected in the stock price. I would bet on Alphabet overcoming many of its current obstacles.

Visa: One of the best moats

A good stock picker is always looking for companies with competitive moats that are difficult to penetrate -- cue the large payments network Visa (NYSE: V). If you haven't previously followed the company, it might surprise you to learn that Visa does not extend consumer credit despite being one of two brands seen on almost all debit and credit cards.

Visa runs the largest open payments system in the world, helping to facilitate the majority of debit and credit card transactions between issuing and acquiring banks. For its part in this process, Visa takes a very small percentage of each transaction, but that adds up quickly because the company is processing $13 trillion of payments a year.

Also, because Visa runs one of the largest payment networks in the world, it has a lot of pricing power and can set rules for the network. This kind of scale is not easy to achieve, which is why there are only a handful of large open payment networks in the world. This is Visa's moat. Furthermore, because Visa takes a small percentage of each transaction, it can hedge inflation -- even when prices go up, its percentage stays the same. Investors should keep in mind, however, that the company is susceptible to a recession, which can lead to less payment volume through the network as consumers and businesses tighten their belts.

Now, there has been some concern that the rise of stablecoins, digital assets pegged to a currency or commodity, could usurp the large payment rails like Visa and Mastercard. Stablecoins can enable people without bank accounts to transfer money to anyone in the world with internet access and with much lower fees than charged by Visa and Mastercard. This could be very helpful for people without access to the banking system or when it comes to cross-border payments.

However, many companies have tried to challenge Visa's dominance before, only to fail or eventually partner with the company. Visa's CEO, Ryan McInerney, recently said on CNBC that Visa has built infrastructure for stablecoins and that they will be an option for consumers, especially if they scale.

But scale is usually one of the reasons that competitors fail. A large-scale payments system not only needs to achieve widespread consumer adoption but also adoption by merchants. Visa also offers some features that could be trickier for stablecoins to replicate, such as partnering with consumer credit providers, giving consumers rewards for spending, and strong fraud prevention. It's way too early, in my opinion, to be concerned about Visa losing its dominance.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Mastercard, Meta Platforms, Microsoft, Nvidia, Tesla, and Visa. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.