The Best Stocks to Invest $50,000 in Right Now

Right now is a great time to invest in technology stocks — for two reasons. First, we’re at the beginning of the growth story for a promising new area, and that’s artificial intelligence (AI). JPMorgan Chase Chief Executive Officer Jamie Dimon has even said that AI could be as transformational for the world as the steam engine and the internet. And analysts predict that in just the time frame of today through 2030, the AI market could grow from $200 billion to more than $1 trillion.

Second, some of these players are trading at reasonable valuations right now considering their long-term prospects. That offers investors an opportunity to get in on this exciting growth story at a fair price.

So, if you have $50,000 to invest and are looking to buy growth stocks, it’s a great idea to pick up technology players that operate in the AI space, from designers of AI products to those who use them or sell AI services to others. I would spread this investment across several players and of course, make sure that this is in the context of a diversified portfolio; it’s always best to invest across a few sectors in case one falls on hard times.

To increase the safety of this bet, I favor companies that don’t rely uniquely on AI and prior to this boom, already built profitable businesses. Considering all of this, here are the best stocks to invest $50,000 in right now.

Amazon

Amazon (NASDAQ: AMZN) may be the safest of all AI bets thanks to its diversification across high-growth industries. The company is a leader in e-commerce and in cloud computing through its Amazon Web Services (AWS) business. These two major areas have helped Amazon generate billions of dollars in revenue and profit in recent years. And today, Amazon’s investment in AI is adding to the gains.

This market giant is benefiting from AI in two ways. First, Amazon uses the technology to increase its own efficiency in e-commerce — for example, selecting the fastest delivery routes for packages. This should lower Amazon’s costs and in turn, boost profit. Second, AWS is going all in on AI, offering a wide range of products and services to fulfill just about every need of a customer launching an AI project. AWS recently reached a $105 billion annual-revenue run rate thanks to this focus on AI.

Today, Amazon shares trade for 39 times forward-earnings estimates. This isn’t dirt cheap but remains very reasonable considering the company’s solid market position.

Oracle

Oracle (NYSE: ORCL) is an up-and-coming AI powerhouse. Originally known for its database software, Oracle has shifted to prioritizing cloud infrastructure in recent times — and it’s been a worthwhile bet because the company has seen demand and revenue take off.

Story continues

In the most-recent quarter, for example, cloud-infrastructure revenue soared 45% to $2.2 billion, and total remaining-performance obligations (RPO) — representing contract backlog — surged 53% to $99 billion. All of this offers investors a reason to be optimistic about growth ahead.

Another positive point is Oracle has signed multicloud agreements with market giants AWS, Microsoft, and Alphabet‘s Google Cloud. These allow customers to use Oracle’s database technology through any of these cloud providers. So Oracle has made itself easy to access and on top of this, gives customers additional types of flexibility, such as Oracle Alloy, which allows partners to customize their cloud experience.

Oracle shares trade for 26 times forward-earnings estimates right now, higher than in the past but a deal considering Oracle’s AI growth.

Meta Platforms

You may use a Meta Platforms (NASDAQ: META) service daily if you message a friend on WhatsApp or Messenger, or post something to Instagram or Facebook. Meta owns these top social media apps and thanks to advertisers on these platforms, the company has generated billions of dollars in earnings.

I expect this to continue since Meta has a solid moat, or competitive advantage. It’s very difficult for users to switch to other platforms, knowing that many of their contacts may not follow. After all, about 3.2 billion people worldwide use at least one of Meta’s apps daily.

But Meta isn’t stopping there. The company has made AI its biggest investment area this year and already has launched its first virtual assistant. In fact, the company aims to create AI tools for professional and leisure purposes to suit the needs of every Meta user. And that may be just the beginning, as Meta is exploring a wide array of AI products and services with the aim of being a leader in the space.

All of this makes the stock look particularly cheap at only 26 times forward-earnings estimates.

Nvidia

This article wouldn’t be complete without mentioning the star of the AI market right now, and that’s Nvidia (NASDAQ: NVDA). Some investors have worried about investing in this chip designer since earnings and share performance have soared so much in recent years. Profit has climbed in the triple digits into the billions of dollars quarter after quarter, and the stock has advanced more than 400% over the past three years.

So, the worry is Nvidia’s strongest wave of growth may have passed, and rivals may slip ahead. I wouldn’t expect Nvidia to register such earnings or share performance non-stop. But I think the growth opportunity is far from over, and a new wave of growth may be just ahead. It’s important to remember that Nvidia is the market leader, and its focus on innovation should keep it there.

The company now is planning for the launch of new architecture Blackwell, a platform that should supercharge growth and could lead to more share performance down the road.

And that’s why Nvidia’s valuation at 42 times forward-earnings estimates looks fair, and it’s worth picking up this winning stock at these levels.

Should you invest $1,000 in Amazon right now?

Before you buy stock in Amazon, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $752,838!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 30, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, 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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon and Oracle. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Oracle. 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.

The Best Stocks to Invest $50,000 in Right Now was originally published by The Motley Fool