Stocks have been regaining their momentum, including these two notable examples.
Nvidia's key role within the AI ecosystem makes it a stock worth considering right now.
Online gaming platform Roblox is growing rapidly, and the stock remains attractive.
The stock market is once again red-hot. As of this writing, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are up 17%, 23%, and 10%, respectively, over the last three months.
With so much optimism surrounding the market, what stocks should investors target right now? Here are two that I think are excellent buys in the month of July.
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First, there's Roblox (NYSE: RBLX). It operates a popular free-to-play online platform that brings developers and players together through tens of millions of games. Indeed, the company's rapidly growing user base is one of its strongest assets. Since 2022, Roblox's daily average users (DAUs) have increased from about 23 million in 2020 to nearly 98 million now.
Not only are Roblox's users growing in number, they're also changing in another crucial way: They are getting older. From its inception, Roblox has been extremely popular among children, with a large proportion of its DAUs being under the age of 13. However, as of its most recent quarter (the three months ended on March 31), 61 million of the company's 98 million DAUs were over the age of 13.
That's important for two reasons. First, it demonstrates that Roblox's fan base is staying loyal to the platform even as they grow older and may be tempted to switch to other gaming platforms or give up gaming altogether. Second, and just as importantly, DAUs over the age of 13 have more disposable income meaning they have more resources to spend on in-game purchases, which is how Roblox derives the majority of its revenue.
In addition to in-game purchasing, Roblox is also diversifying its sources of revenue. The company has embarked on several new monetization initiatives including selling merchandise, incorporating in-game advertising, and experimenting with paid access for certain games.
Despite all these positives, Roblox stock isn't for every investor or investment portfolio. Any setback or disappointment in user growth, revenue, or guidance could send shares tumbling. That said, growth investors with a long-term investment horizon would be smart to consider Roblox stock now.
Then, there's Nvidia (NASDAQ: NVDA). It should come as no surprise why Nvidia makes the cut as a stock worthy of buying this month. For starters, as of this writing, Nvidia is now the largest company in the world, with a market cap exceeding $4 trillion.
In short, the company has soared in value thanks to its key role within the artificial intelligence (AI) ecosystem. Specifically, Nvidia remains the leader in graphics processing unit (GPU) design. In turn, fellow tech giants like Alphabet, Meta Platforms, and Tesla are all buying tremendous amounts of GPUs from Nvidia as they race to develop their AI infrastructure.
Nvidia's financials paint a stunning picture. The company's trailing-12-month revenue now stands at $149 billion, up from around $26 billion less than three years ago. Similarly, the company's net income has soared. It now stands at $77 billion, up from $4 billion in 2023.
What's more, sell-side analysts agree Nvidia is far from done growing. According to estimates compiled by Yahoo! Finance, Nvidia's annual revenue should increase to nearly $200 billion for fiscal 2026 (the 12 months ending on Jan. 25, 2026), while the company's fiscal 2027 revenue should rise to more than $250 billion.
Granted, projections are not reality, and Nvidia could fall short of these lofty expectations. In addition, larger economic concerns or some unforeseen development could lead to a downturn in Nvidia's fortunes.
However, over the long term, I'm convinced that Nvidia and its prime position within the AI ecosystem will deliver value for shareholders. It remains a stock worth considering right now.
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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. Jake Lerch has positions in Alphabet, Nvidia, Roblox, and Tesla. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Nvidia, Roblox, and Tesla. The Motley Fool has a disclosure policy.