The Nasdaq Composite The index is up more than 30% in the past twelve months, mainly driven by technology stocks. The industry has grown tremendously as interest in emerging sectors such as artificial intelligence (AI) and cloud computing has skyrocketed. As a result, it could be worth making a hefty investment in the sector to potentially benefit from its long-term development.
When it comes to the stock market, it is always best to invest in a company’s business rather than just its shares. By prioritizing organizations that are home to consumer-favorite products or that at least have a solid business model, your portfolio can continue to grow for decades. Meanwhile, technology companies are known for their long-term profits, with many capitalizing on the ever-expanding and innovative nature of the sector.
So, are you planning to put $50,000 into stocks? Here are two of the best stocks that money can buy (and that are even worth buying with a smaller investment).
1. Intel
Intel (NASDAQ: INTC) has attracted a lot of attention over the past year as it has made significant changes to its business model after a challenging few years. The company’s shares have fallen 40% since 2021, due to poor market conditions, declining revenues and shrinking market share in the central processing unit (CPU) sector.
However, recent Intel headwinds mean now is the best time to buy.
This chart shows that Intel is one of AI’s best-valued stocks, with a lower price-to-earnings (P/E) ratio than some of the industry’s most prominent players. Each of these companies currently has or has announced a venture into the AI ​​chip market, making them fierce competitors to Intel. Still, a recent dip may have made Intel stock a bargain compared to its peers, helping your money go further.
Last month, the company debuted its Gaudi 3 AI accelerator, a chip designed to beat the market leader Nvidia‘s AI graphics processing units (GPUs). Meanwhile, Intel is undergoing a major shift in its business model, moving to a foundry model where it will prioritize chip production.
On May 16, CEO Pat Gelsinger spoke about the upcoming Ohio factory, saying, “I want our Columbus location here, Ohio One, to be the AI ​​systems factory for the nation.”
Intel is on a promising growth trajectory as it expands in AI and sets its sights on manufacturing. It’s still too early to restructure the company, but recent gains are promising. In the first quarter of 2024, Intel’s AI and data center segment posted operating income of $184 million, a significant increase from the negative $69 million reported the year before. Additionally, Intel Foundry’s operating income rose 8% during the quarter.
Intel still has a lot of work to do, but on its current growth path it could see its stock soar over the next decade. A $25,000 investment would give you roughly 817 shares of Intel, significantly more than rivals Nvidia or AMDmaking Intel stock a screaming buy right now.
2. Alphabet
Home to powerful brands like YouTube, Android and Google, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) has acquired a powerful position in technology. The company attracts billions of users to its services, increasing annual revenue and operating income by 90% and 135% over the past five years.
Alphabet has used its massive user base to build a lucrative advertising business. In the first quarter of 2024, the company saw a spike in advertising revenue, with Google Services sales increasing 14% year over year, while operating income rose 28%.
However, all eyes were on Alphabet’s fast-growing cloud business, Google Cloud. In its most recent quarter, the platform reported a 28% increase in revenue, while operating income soared 371%. For reference: cloud giants Amazon And Microsoft saw their cloud revenues increase by 17% and 21% over the same period.
Like Intel, Alphabet is the best-valued option among its rivals. All the companies in this diagram have focused large parts of their activities on AI software development and compete fiercely with each other. Meanwhile, Alphabet’s lower price-to-earnings ratio indicates that its shares are trading at a much better value than those of its peers.
An investment of $25,000 would buy approximately 142 shares of Alphabet at today’s price. The company’s shares are up more than 200% in the last five years alone, but could outperform in the not-too-distant future as the company continues to expand in AI and capitalize on its booming advertising business.
Should You Invest $1,000 in Intel Right Now?
Before you buy shares in Intel, consider this:
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Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Microsoft and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls to Intel, long January 2026 $395 calls to Microsoft, short January 2026 $405 calls to Microsoft, and short May 2024 $47 calls to Intel. The Motley Fool has a disclosure policy.
The Best Stocks to Invest $50,000 In Right Now was originally published by The Motley Fool
