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A big dominant theme in the stock market this year has been artificial intelligence (AI). There’s no disputing the gems that can be found in this sector, but it doesn’t mean that all AI stocks should be bought.
In fact, some relatively boring S&P 500 stocks are delivering impressive performances that should be paid attention to!
A payments giant
A case that caught my eye is Visa (NYSE:V). It might not generate the same excitement as the latest AI stock, but its underlying business is difficult for me to ignore. The shares have risen around 7% over the past year, and I think there are good reasons they could continue performing well.
At its core, Visa operates one of the world’s largest electronic payment networks. When I pay for something using a Visa-branded card, the company helps connect the merchant, bank and payment processor to authorise and settle the transaction.
Importantly, Visa generally isn’t lending me the money itself. Instead, it collects fees from facilitating payments, meaning it can benefit from rising spending without taking on the same credit risk as a traditional bank.
Strong profits
Let’s talk about the profitability, because its incredibly impressive. In its latest quarter, it generated $11.6bn of net revenue and $5.63bn of GAAP net income. That’s a net profit margin of roughly 48%. On an operating basis, it made about $6.9bn before non-operating items, implying an operating margin close to 59%.
By comparison, look at some of the market’s more fashionable AI names. CoreWeave generated $2.58bn of Q2 revenue but lost $626m, equivalent to a -24% net margin. Even after adjustments, it still recorded a $567m net loss. Nebius‘s AI infrastructure operations have also required enormous investment and recorded a substantial operating loss in 2025.
Of course, I’m not saying Visa’s better at generating profit than any AI-related stock. There are companies like Nvidia that are equally as impressive. But as far as a traditional S&P 500 stock goes, Visa shouldn’t be ruled out.
The outlook
Looking forward, I see several reasons for optimism. Visa doesn’t need to reinvent its core business to keep growing. Increasing global consumption, e-commerce and the continued transition towards digital payments can all push more transactions across its existing infrastructure.
But there’s innovation as well. Some might raise an eyebrow when I talk about stablecoins, but this is a growing area that has huge potential. Visa’s already attempting to integrate them through its ecosystem. It now supports more than 130 stablecoin-linked card programmes across over 40 countries and recently launched its own enterprise stablecoin platform.
All of this doesn’t mean that Visa is risk-free. It’s frequently at risk with regulatory intervention. FinTech compeition is hot right now, so alternative payment technologies could also threaten its economics.
Yet even with these worries, I think it’s a great alternative S&P 500 stock for investors to consider having in their portfolio.
Should you invest £5,000 in Visa right now?
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Jon Smith does not hold any positions in the companies mentioned
This story originally appeared on Motley Fool
