Top Investment Picks for Various Budget Levels in the Current Market

The Best Stock to Invest $1,000 in Right Now | The Motley Fool

Stocks across tech have declined over the last month, as recent economic reports have made Wall Street fearful of a looming recession. A new jobs report revealed the U.S. labor market added 114,000 jobs in July, significantly lower than expected and the 179,000 reported in June. The figures caused a sell-off in the stock market, with tech companies experiencing some of the worst declines. However, history suggests a sell-off isn't a time to panic, but, more often, a time to bulk up your portfolio with some of the world's fastest-growing companies. The 20 biggest tech companies are collectively worth more than $20 trillion, yet maintain massive growth potential thanks to budding industries like artificial intelligence (AI) and cloud computing. So, here is one of the best stocks to invest $1,000 in right now. However, even a smaller investment could go far in the hands of this tech giant. Advanced Micro Devices (AMD 4.70%) has seen its stock price tumble 24% in the last 30 days. The dip has brought its shares down about 9% year to date, significantly lower than its biggest rival, Nvidia, which has delivered stock growth of 112%. AMD had a challenging start to 2024 after falling behind in AI last year and scrambling to catch up. Heavy investment in artificial intelligence, alongside dwindling sales in its gaming division, hasn't enthused stockholders. However, its latest quarterly earnings suggest the company is in the middle of a recovery that could massively pay off in the coming years. Meanwhile, recent stock declines are an opportunity to invest at a value compared to its potential. AMD reported its second quarter of 2024 earnings on July 30. Revenue rose 9% year over year to $6 billion, beating analysts' estimates by $120 million. The quarter brought record growth in the company's data center segment, which posted a revenue increase of 115% thanks to soaring AI graphics processing unit (GPU) sales. A spike in central processing unit (CPUs) sales also boosted revenue in its client segment by 49% year over year. Gaming remained a sore point for the quarter, with revenue falling 59%. However, AMD's shift to AI seemed to make the decline inconsequential for now. Despite weakness in gaming, total operating income for the period still skyrocketed by 647% while gross margins improved to 49%. Over the last year, AMD has worked tirelessly to advance its AI technology and catch Nvidia, and recent earnings finally show that work is paying off. AMD AI chips are attracting prominent organizations, bringing on Microsoft's Azure, Amazon Web Services, and Alphabet's Google Cloud as clients. AMD's market cap is currently about $217 billion. Considering Nvidia's market cap was $359 billion at the start of 2023 and is now $2.5 trillion, AMD could see major gains over the next year, even if it doesn't quite reach that height. For much of this year, AMD's stock price has appeared too expensive compared to its earnings. However, a glowing Q2 2024 has improved its valuation and made its stock worth considering again. Recent earnings and a dip in its stock have brought AMD's forward price-to-earnings (P/E) ratio and price-to-sales (P/S) ratio below its 12-month averages for the metrics, suggesting now is one of the best times in months to invest. Moreover, AMD's forward P/E of about 40 is not far off Nvidia's forward P/E of 39. AMD's P/S is also well below Nvidia's position of 33 for the metric, which potentially makes it a better value than its biggest chip competitor. AMD's quarterly free cash flow has increased 81% since Jan. 1, further highlighting the positive trajectory of its business. As a result, AMD's stock is a no-brainer for investing $1,000 right now and holding long-term.

The Ultimate Growth Stock to Buy With $10,000 Right Now | The Motley Fool

AMD had a rough start to the year but is making promising headway in AI. Advanced Micro Devices (AMD -0.27%) seemed to fall out of favor with Wall Street in the first half of 2024, with its stock down 8% year to date. For reference, chip rival Nvidia's stock increased 113% in the same period. Mediocre earnings suggested AMD had yet to make significant headway in artificial intelligence (AI), and a general pullback on tech stocks fueled the declines. However, AMD posted its second quarter of 2024 earnings on July 30, which finally saw the chipmaker gaining in the budding industry. The company's AI-focused data center segment delivered record growth for the period alongside a sales boost in its central processing unit (CPU) division. As a result, AMD's stock is an increasingly attractive investment. The company boasts a long growth history, with its shares up close to 5,000% over the last decade. Meanwhile, revenue and operating income have soared 312% and 169%, respectively. AMD is only just getting started in AI and could see major gains as it expands in the coming years. So, here's the ultimate growth stock to buy with $10,000 right now. AMD and Nvidia are often compared; both are leading competitors in the chip market. These companies collectively account for nearly the entire discrete graphics processing unit (GPU) sector and have similar dominance in AI GPUs. However, their businesses are at vastly different stages of development, illustrated by AMD's market cap at $221 billion and Nvidia's currently at $2.6 trillion. The difference could indicate massive growth potential for AMD as it continues to make headway in artificial intelligence, an industry worth $197 billion in 2023 and expected to reach just under $2 trillion by the end of the decade. The AI market is expanding at a compound annual growth rate of 37%, suggesting there's plenty of room for Nvidia to retain its dominant market share and for AMD to carve out a lucrative role for itself. Recent earnings show AMD doing just that. In Q2 2024, the company's data center segment posted revenue gains of 115% year over year. Meanwhile, operating income soared 405% to $743 million. Total revenue for the quarter increased by 9% despite a 59% decline in gaming revenue. The figures represent a positive shift in AMD's business as its hefty investment in AI offsets losses in other divisions. Before interest in AI rose through the roof last year, AMD was primarily known for its role in gaming. For years, the company has enjoyed significant success in selling its GPUs and CPUs directly to consumers who use these chips to build high-performance gaming PCs or powerful setups for video editing. The company continues to profit from this sector thanks to increased CPU sales, proven by a 49% year-over-year rise in its client segment. Yet, its gaming division, which includes income from GPU and semi-custom chip sales, has been on a downward trend. The company has reasoned that declines are mainly because of lower semi-custom revenue. Some of AMD's biggest semi-custom customers include Sony and Microsoft, which use these chips to power game consoles such as the PlayStation 5 and Xbox Series X|S. Sales for these consoles are often cyclical, starting strong and mostly dwindling until the next generation. Both of these consoles were launched in 2020, which could explain the lower chip sales for AMD. However, a mid-generation console refresh could be just around the corner, with Sony reportedly working on a PlayStation 5 Pro and Microsoft likely to follow suit. New consoles would likely boost AMD's semi-custom chip sales and its gaming segment. Along with positive growth from AI and CPUs, AMD has become a well-rounded business that could be worth investing in. AMD struggled to gain investors' support for much of this year as it worked to catch up in AI. Heavy investment in the generative technology and average earnings made its stock too expensive to consider. However, recent quarterly results have improved its value. This chart shows AMD's forward price-to-earnings (P/E) and price-to-sales (P/S) ratios are below the company's 12-month averages for both metrics. The figures suggest AMD's stock is trading at one of its best values in months. In addition to massive potential in AI and encouraging earnings, AMD is an attractive stock to buy with $10,000 and hold long-term.

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

These three tech stocks are off their highs and look like great long-term buys. Warren Buffett once famously said, "Be fearful when others are greedy and greedy when others are fearful." With that in mind, here are three tech stocks investors should consider piling into while others have become fearful. Alphabet (GOOGL 0.58%) shares have sold off recently on concern about increasing competition in search as well as a court ruling that the company's Google search engine is a monopoly. Although Alphabet has been found guilty of antitrust practices, a final resolution to the court ruling and what remedies are put in place will likely take quite some time to be implemented. It wouldn't be surprising if it stretches out into 2026. The court ruling focused mainly on the company's payments to smartphone makers to be the exclusive default search engine of their mobile devices, so there will likely be changes to these agreements. Meanwhile, investors have become worried about the financial effect artificial intelligence (AI) will have on Google's business model as well as what impact AI-powered search engines from the likes of OpenAI and Perplexity will have on the company. Both of these issues look more than manageable. First, Alphabet has started to innovate on the search front not just through AI, but with features such as visual search and circle to search. The former lets users conduct a search using the smartphone's camera, while the latter lets users circle or even scribble on an image or text to get more information about a subject, without leaving an app. With Alphabet's decades of data, a brand synonymous with internet search, a business that throws off huge cash flow, and new monetization opportunities stemming from AI, it will not be easy for a money-losing, sub-scale competitor to make any meaningful inroads into Google's search dominance. While the court ruling likely will make it easier for users to switch default search engines, the company has about two years to make sure not many people will want to by further increasing its technological lead in search. Trading at a forward price-to-earnings (P/E) ratio of less than 19, the stock is a bargain given the growth opportunities in front of it. Shares of Taiwan Semiconductor Manufacturing Company (TSM 2.35%), or TSMC for short, sold off earlier this summer on news of tougher export restrictions on semiconductors to China, as well as comments from presidential candidate Donald Trump claiming that Taiwan had taken 100% of the chip business from the U.S. and that it should pay for its own military. Although there are certainly geopolitical risks when it comes to investing in TSMC, given Taiwan's importance to chip manufacturing and the havoc it would cause if there was a disruption, these risks are likely overblown. Meanwhile, as the leading semiconductor contract manufacturer in the world, the company is set to continue to nicely benefit from the buildout of AI infrastructure. The company's revenue rose nearly 33% year over year in Q2 to $20.8 billion, while it recently reported that it had its best sales month ever in July, with revenue rising 45% in the month. The company has been expanding production to meet high demand, and is expected to raise prices by as much as 10% next year for some smaller nodes. This should lead to some very nice growth next year. Trading at a 20 times forward P/E based on 2025 analyst estimates, the stock is too cheap to ignore given its growth outlook. After a strong run, shares of Nvidia (NVDA 4.05%) have pulled back on worries the stock has run too far too fast and that there would be delays for its newest Blackwell chip. While the latter is probably true, demand for its chips is so high that it likely will have only a minimal impact on its results, as customers continue to scoop up its current-generation Hopper chips instead. Although there is some worry that AI infrastructure spending could slow, the commentary from the the major companies involved in the AI buildout all point to increased investments ahead. At this point, the worry among customers is not overbuilding capacity, but not building enough capacity. Meanwhile, the more advanced large language models (LLMs) become, the more computing power they will need. For example, Meta Platforms recently said its Llama 4 LLM would likely need 10 times the computing power to train compared to Llama 3. That means the need for a lot more graphics processing units (GPUs) from Nvidia. With demand not letting up, Nvidia's stock looks inexpensive trading at under 30 times next year's earnings consensus. This looks like a great time to buy the dip.

S&P 500 Sell-Off: 2 No-Brainer Artificial Intelligence (AI) Stocks to Buy With $1,000 Right Now | The Motley Fool

The recent stock market dip could be a golden opportunity for investors to load up on artificial intelligence (AI) stocks. The S&P 500 had a dream run in the first half of this year, surging 15% with almost no volatility. But it has declined by 5.7% since peaking in July as investors digest weak economic data combined with a currency shock in the Japanese yen. History suggests the S&P 500 always climbs to new highs given enough time, so this correction is likely a buying opportunity. In fact, this might be a great chance for investors to buy artificial intelligence (AI) stocks at a discount, ahead of what could be significant long-term growth. According to many Wall Street forecasts, AI could add trillions of dollars to the global economy in the coming decade, with contributions from both hardware and software companies. Here's why investors with $1,000 to spare might want to split it equally between shares of Advanced Micro Devices (AMD -0.27%) and Lemonade (LMND 1.34%) right now. AMD has emerged as a worthy competitor to Nvidia in the market for AI data center chips. Its new MI300X graphics processing unit (GPU) is already a hit among some of the world's largest data center operators like Microsoft and Oracle, and many customers are finding performance and cost advantages over Nvidia's industry-leading H100. But with Nvidia about to launch its next-generation GPUs built on its new Blackwell architecture -- which could be up to 5 times faster than its H100 -- AMD can't afford to stand still. That's why it plans to launch the MI350 next year, and it will be based on a new architecture called Compute DNA (CDNA) 4, which could deliver 35 times more performance than CDNA 3 chips like the MI300. AMD hopes this generation of GPUs will compete directly with Nvidia's Blackwell GPUs. But AI is now coming to personal computers and devices, which means AI will be processed on-device rather than relying on data centers to handle each query. That will create a faster user experience when engaging with AI chatbots and other software. AMD just released the Ryzen AI 300 series for notebooks, which is the fastest neural processing unit (NPU) in the industry. The company says more than 100 platforms will launch with these chips in the coming quarters, from leading computer manufacturers like HP, Asus, Acer, and more. Earlier this year, AMD said it had a 90% share in the market for AI-enabled personal computers, and the Ryzen AI 300 series could extend that dominance. During the recent second quarter of 2024 (ended June 30), AMD's data center revenue surged 115% from a year ago to a record $2.8 billion, which included $1 billion in MI300 sales. The company's client segment, which is home to its Ryzen AI chips, generated $1.5 billion in revenue, which was a 49% increase. That strength is likely to persist for the foreseeable future. In fact, AMD just increased its full-year forecast for GPU sales to $4.5 billion (from $4 billion just three months ago). With AMD stock down 35% from its all-time high, investors are presented with a golden buying opportunity ahead of what could be a substantial long-term growth phase. Lemonade is an insurance company using AI to shake up the renters, homeowners, life, pet, and car insurance markets. The company is valued at just $1.1 billion, so it's a minnow compared to its entrenched competitors like Allstate, which is worth $45 billion, or Geico, which is owned by the $922 billion Berkshire Hathaway conglomerate. With that said, Lemonade is making inroads. It had over 2.1 million customers as of the second quarter of 2024 (ended June 30), and it's successfully attracting younger cohorts, which have historically been underinsured. Its tech-based approach and its commitment to charitable giving through its "Giveback" program are two reasons for its success. Lemonade relies on AI chatbots to handle most customer interactions. Its Maya chatbot can write a quote for a potential customer in under 90 seconds, and AI Jim can pay claims in just three minutes without human intervention. With traditional insurers, the claims process can involve several phone calls and slow payouts -- considering younger Americans hate talking on the phone, it's no surprise they are flocking to Lemonade. Lemonade also uses AI internally to calculate premiums to ensure customers get the fairest possible price. It even uses AI to detect underperforming products and geographic markets, so management can quickly adjust its marketing spending. It's driving a wave of efficiency that allowed the company to shrink its workforce by 9% over the past year, while simultaneously growing its insurance book by 22%. Lemonade had a record $838.8 million in in-force premium at the end of Q2, with the average premium per customer also hitting a new record of $387. At the same time, its gross loss ratio (the portion of premiums paid out as claims) continued to fall, coming in at 79%. Lemonade says 75% is the sweet spot for a thriving insurance business, and it's almost there. Lemonade stock is down 90% from its all-time high, which was set during the tech frenzy of 2021. It was unquestionably overvalued back then, but its recent weakness is due to the company's persistent losses at the bottom line. However, it managed to deliver positive net cash flow for the first time ever in Q2, and management believes it can maintain that consistently. It means Lemonade won't have to tap investors (or banks) for further funding anytime soon. Thanks to the steep dip, Lemonade stock is now trading at a price-to-sales ratio of just 2.2, which is near the cheapest level since the company came public four years ago.