The stock market may not seem like the friendliest place for investors right now, with the three major benchmarks — the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite — down since the start of the year. Worries about President Donald Trump’s plan to impose tariffs on imports have halted the positive momentum that carried indexes over the past two years. The concern is that duties will lift prices and weigh on economic growth.
Though Trump temporarily halted the tariffs to allow for negotiations with countries and even announced a first deal — with the U.K. — we’re still early in this process of talks with other nations, so we don’t yet know the eventual tariff impact. But here’s some good news. For long-term investors, these uncertain times are actually the moment to invest.
That’s because you can buy quality, well-established companies for reasonable, and sometimes even dirt cheap, prices. Let’s check out the best stocks to invest $1,000 in now. With this amount or even less, you can get in on all the following, or decide to bet on just one.
Image source: Getty Images.
1. Nvidia
It isn’t every day that you’ll find shares of the top artificial intelligence (AI) chip company at a bargain price. Earlier this year, Nvidia (NVDA -0.62%) stock traded for 50x forward earnings estimates, but after recent stock price declines, the shares are now trading for 26x these estimates. The last time Nvidia was this cheap was about a year ago.
So, why should you jump in now? Despite today’s economic uncertainty, the AI boom continues. In fact, analysts forecast the AI market will reach $2 trillion in less than 10 years. Nvidia should be the first to benefit as it dominates the AI chip market, and the company’s focus on innovation will likely keep it in this leading position.
A few months ago, Nvidia successfully rolled out its latest chip architecture, Blackwell, to extraordinary demand and has set out a roadmap of annual releases for the coming two years. This tech giant has generated record levels of revenue — and at levels of high profitability with gross margin wider than 70%. And Nvidia has $43 billion in cash to support its fast-paced development. All of this makes Nvidia a no-brainer addition to any growth-focused portfolio right now.
2. Target
Target (TGT -0.65%) has suffered in recent years amid tougher times for the consumer, but the company has still grown earnings over the years and has what it takes to keep that long-term growth going. This retailer used the early pandemic period to maximize convenience for shoppers, growing its digital sales and same-day delivery options.
TGT Net Income (Annual) data by YCharts.
The company has also invested in store renovations and focused on using its stores to rapidly fulfill digital orders. Target’s efforts have resulted in almost $30 billion in sales growth over the past five years. Another element that should set this retail giant up for long-term success is its solid portfolio of owned brands. The company has more than 40, and about a quarter of them are bringing in at least $1 billion in sales annually. These brands are particularly attractive for Target, as the company has complete control over the production and marketing of these goods, keeping costs low and profits high.
Target shares have slumped 57% over the past three years. But I see this as a fantastic opportunity to get in on this future winner, especially at today’s valuation of only 10x forward earnings estimates, around its lowest in at least three years.
3. Amazon
Amazon‘s (AMZN 0.55%) e-commerce and cloud computing businesses are starting to greatly benefit from decisions the company made a few years ago.
I’ll start with e-commerce. The company revamped its cost structure and shifted to a regional fulfillment model from a national one. This has helped Amazon lower overall costs, and the move to bring products closer to the customer is lowering the cost to serve. And Amazon isn’t done with this: It’s now improving its inbound network — the system that brings products to fulfillment centers — and says that should result in further savings.
As for cloud computing, Amazon Web Services (AWS) has invested heavily in AI, which has brought the unit to a $117 billion annual revenue run rate. AWS, the world’s No. 1 cloud provider, offers customers a broad range of AI products and services, from top Nvidia chips to its in-house designed chips for cost-conscious customers. And let’s not forget AWS’s fully managed AI service, Amazon Bedrock.
The e-commerce and cloud businesses have kept growth going steadily at Amazon in recent times. In the latest quarter, net sales, rising 9%, topped $155 billion. Amazon’s key decisions should keep that going and favor profitability in the quarters to come. And trading for only 31x forward earnings estimates now, this stock makes a fantastic place to park your $1,000.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon and Target. The Motley Fool has positions in and recommends Amazon, Nvidia, and Target. The Motley Fool has a disclosure policy.
