Buying great businesses when they’re on sale is an excellent wealth-building strategy.
With volatility returning to the stock market in recent days, patient investors may soon have an opportunity to scoop up shares of some outstanding companies at a discount. Here are three elite stocks to place near the top of your buy list.
Costco Wholesale
Consumers love to buy quality merchandise at bargain prices. Costco Wholesale (COST -0.77%) has long made masterful use of this simple yet difficult-to-replicate formula to the benefit of its members and shareholders alike.
With over $250 billion in annual revenue, Costco’s massive scale allows it to offer a curated selection of goods at prices its competitors find challenging to match. These ultra-low prices entice people to purchase Costco memberships and remain loyal customers. They also enable the discount retailer to raise its membership fees from time to time, which helps to boost its bottom line.
These membership fees, in turn, are fueling Costco’s earnings growth. The discount retail leader passes these profits on to its shareowners via steadily growing quarterly cash dividends, as well as occasional special dividends. Store count expansion, combined with rising sales at existing locations, should continue to drive Costco’s profits higher in the coming years.
Visa
A steadily increasing number of transactions at Costco and other retailers are being completed via digital channels. As the operator of the largest debit and credit card networks, Visa (V 0.22%) is well-placed to cash in on this powerful global trend.
Visa’s scale is breathtaking. Its 14,500 banking partners have issued more than 4.5 billion payment cards in over 200 countries and territories, which are accepted at over 130 million merchant locations. Visa, in turn, processed an astounding 297 billion transactions totaling $15.5 trillion during the 12 months ended June 30.
Visa charges relatively small fees for its payment processing services. Yet, when combined with the payment giant’s other business lines, these fees collectively amounted to a whopping $4.9 billion in net income in the third quarter alone. Visa’s impressive profitability has enabled it to reward its investors with 16 straight years of dividend raises — a streak that’s likely to extend well into the next decade and beyond.
Nvidia
Like the global shift from cash to digital forms of payment, the artificial intelligence (AI) revolution is set to create lucrative opportunities for shrewd investors. Nvidia (NVDA 1.40%) is profiting from the AI gold rush more than any other company, and more good times lie ahead for its shareholders.
The semiconductor titan’s cutting-edge chips power the most advanced AI applications. Tech powerhouses like Microsoft, Meta Platforms, and Tesla rely on Nvidia’s hardware to accelerate their AI workloads in their massive cloud data centers.
With the AI arms race heating up, demand for Nvidia’s industry-leading computing products is soaring. The chipmaker’s sales surged by 262% year over year to $26 billion in the quarter ended April 28. Its net income, in turn, increased by a stunning 628% to $15 billion.
CEO Jensen Huang believes that $1 trillion worth of data center hardware will eventually be replaced by accelerated computing platforms. With so much growth still ahead, investors who buy Nvidia’s shares today should be well rewarded.
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. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, 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.
