Three Stocks to Buy for Long-Term Gains Under $1,000
Choosing the right stocks to invest in is challenging, especially when deciding on the timing. No one wants to watch their investment lose value immediately after purchasing. Unfortunately, market timing is notoriously difficult. While luck may work occasionally, a far better strategy involves investing in companies with growth potential when their stocks are fairly priced or undervalued.
Despite a strong year for the market overall, many top-performing companies appear pricey. However, several exceptions exist. Here are three promising stocks you can currently purchase for less than $1,000 total.
Nvidia: A Leader in AI Chips
Strong performer Nvidia (NASDAQ: NVDA) has seen its shares rise over 500% in the last three years. There’s still room for investment, especially since Nvidia has captured a significant portion of the growing market for high-performance chips needed for artificial intelligence (AI) applications. The company’s remarkable revenue and earnings growth since last year has driven these stock gains.
Nvidia’s upcoming Blackwell chips are in high demand, succeeding the popular H100 series. Analysts expect the company’s earnings to grow at an average rate of 41% annually for the next three to five years, fueled by ongoing AI investments. With a forward P/E ratio of 48, the anticipated earnings growth justifies this valuation, though investors should keep an eye on competitive threats. If Nvidia maintains its leading position, its stock remains an appealing option.
Meta Platforms: A Social Media and AI Contender
Meta Platforms (NASDAQ: META) is transforming into a major player in AI, driven by CEO Mark Zuckerberg’s commitment to technological innovation. The company has not only integrated AI into its advertising business but has also open-sourced its large language model, Llama, while acquiring a substantial inventory of AI chips.
Importantly, Meta’s AI efforts complement its core social media business, which includes Facebook, Instagram, WhatsApp, and Threads. This vast user base of 3.27 billion daily active users forms a solid foundation for generating advertising revenue. Currently, Meta’s stock is trading at a multiple of 27 times its projected 2024 earnings, with analysts forecasting an impressive 19% annual growth rate for earnings in the coming years. For a high-performing business, that’s a reasonable price, especially if Meta succeeds in further leveraging AI for profit.
SentinelOne: Emerging Cybersecurity Innovator
SentinelOne (NYSE: S) leverages AI to autonomously shield customers from cybersecurity threats. Its advanced technology has consistently placed it at the forefront in external evaluations, leading to robust revenue growth, evidenced by a 33% year-over-year increase in sales for Q2—a noteworthy achievement among competitors.
A recent significant partnership with Lenovo to include SentinelOne’s security platform in new PCs is expected to enhance its already promising growth trajectory.
Although SentinelOne is not yet profitable, this has impacted its stock valuation negatively. It currently trades at a lower enterprise value relative to its revenue compared to peers. However, as revenue accelerates and the balance sheet remains solid with cash reserves and no debt, the potential for positive market reception is significant. Investing in SentinelOne could pay off in the near future.
Should You Consider Investing in Nvidia Right Now?
Before making a decision, take note of the following:
The Motley Fool Stock Advisor analyst team has recently highlighted what they believe are the 10 best stocks for current investors to consider, and notably, Nvidia is not included in that list. These ten selections are anticipated to deliver remarkable returns in the upcoming years.
For context, consider that Nvidia was recommended on April 15, 2005; if you had invested $1,000 at that time, your investment would have grown to approximately $845,679!*
Stock Advisor provides an accessible framework for investing success, offering guidance on portfolio construction and regular updates, as well as two new stock recommendations each month. Since 2002, the service has more than quadrupled the returns of the S&P 500 index.*
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*Stock Advisor returns as of October 14, 2024
Randi Zuckerberg, a former Facebook market development director and sister of Meta CEO Mark Zuckerberg, serves on The Motley Fool’s board. Justin Pope holds shares in SentinelOne. The Motley Fool recommends and has positions in Meta Platforms and Nvidia. Their disclosure policy can be accessed for more information.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
