Got $1,000? 2 Stocks to Buy Now While They're On Sale

Motley Fool contributors Jason Hall and Tyler Crowe pitched A.O. Smith (AOS) and Toast (TOST) as "incredible" buys while shares are "on sale" (video published Mar 30, 2026; prices referenced Mar 13, 2026). Disclosure: The Motley Fool recommends A.O. Smith and Toast; Jason Hall holds options on Toast (long Jan 2027 $25 calls and short Jan 2027 $25 puts) while Tyler Crowe has no positions. Note Stock Advisor’s recent top-10 list did not include Toast.

Analysis

Toast’s current dislocation looks less like a pure demand story and more like a re-pricing of two linked exposures: recurring SaaS ARR (sticky, higher-margin) and lumpy hardware & payments GPV (cyclical, tied to SMB capex and the cost of capital). If management can convert incremental digital ordering, loyalty and yield-management features into a 5-8 point expansion in ARR gross margin over 12–24 months, the equity rerating is credible even with muted hardware cycles.

A key second-order effect is rising AI-driven feature adoption: deploying forecasting, dynamic menu pricing and NLP increases per-customer compute spend (cloud or edge GPUs) and creates a new, variable cost line that will compress near-term margins but raise ARPU if monetized as a premium tier. That evolution also shifts vendor relationships — Toast becomes more dependent on cloud/GPU suppliers for product differentiation, which benefits GPU/cloud vendors but exposes Toast to variable input-cost inflation.

Tail risks live in the SME credit channel and competitive payments compression: a 200–300 bps tightening in small-business loan availability or an incremental 200–300 bp cut to payment take rates by a rival would materially worsen churn and hardware attach rates within 3–9 months. Conversely, a macro improvement or a successful high-ARPU premium rollout could drive 30–40% stock upside within 12–24 months; watch churn, gross payment volume trends, and compute expense as the immediate catalysts.

Key Decisions for Investors

• TOST LEAP directional: Buy TOST Jan 2028 $25 calls (allocate 1–2% NAV). Rationale: asymmetric upside if ARR monetization and premium AI tiers lift ARPU over 12–24 months. Risk: full premium loss if SMB capex stalls; target 3x payoff to trim into strength.
• TOST income/accumulate: Sell cash-secured TOST Sep 2026 $18 puts size-constrained to 1% NAV to collect premium and accumulate shares below current levels. Rationale: effective yield >3–4% while giving optionality to own at a lower cost basis. Risk: assignment if restaurant recoveries fail; set hard stop or hedge with long calls if assigned.
• AI structural pair: Long NVDA Jan 2027 $700 calls (0.5% NAV) / Short INTC Jan 2027 $30 puts (size matched for margin). Rationale: captures continued GPU-led AI capex upside vs secular CPU share-pressure on legacy Intel. Risk: macro tech sell-off; keep position small and monitor data-center orders; target asymmetric 2–4x payoff on NVDA leg to justify downside on INTC leg.
• Event hedge / optionality in content-driven recoveries: Buy NFLX Sep 2026 $450–$550 call spread (debit) as a cheap upside kicker funded by selling out-of-the-money calls. Rationale: if consumer spend re-accelerates, streaming discretionary uplift supports ad/price mix optionality which benefits digital ordering partners indirectly. Risk: content cycle misses or subscriber weakness; capped upside but low cost basis.