Visa's Underwhelming yet Profitable Performance Beats Some AI Stocks

A popular theme in the stock market this year has been artificial intelligence (AI), but it's not the only area where investors can find growth. In fact, some relatively boring S&P 500 stocks are delivering impressive performances that warrant attention.

One such example is Visa (NYSE:V), a payments giant with a track record of strong profits. Despite ongoing uncertainties from US tariffs to global conflicts, Visa has risen around 7% over the past year and shows potential for continued growth.

The company's business model is built on collecting fees from facilitating payments, allowing it to benefit from rising spending without taking on credit risk like traditional banks. Its latest quarter saw $11.6bn of net revenue and $5.63bn of GAAP net income, with a net profit margin of roughly 48%. In comparison, some AI-related stocks have struggled with profitability.

Visa's outlook is also promising, as increasing global consumption, e-commerce, and digital payments can push more transactions across its existing infrastructure. The company is innovating in areas like stablecoins, which it supports through over 130 card programmes in 40 countries. However, regulatory intervention and fintech competition remain risks to consider.