Deciding which stocks to buy is a big decision for any investor, but choosing when to buy can be just as hard. Nobody wants to buy a stock and immediately see their investment turn red on a loss. Yet, it's a reality investors must face. The truth is that nobody can time the markets.
Sure, you might get lucky once or twice, but the better strategy is to think about companies that can grow over time and buy the stocks when they are reasonably valued or cheap.
The market has had a fantastic year, so most of the best companies seem expensive. That said, there are some exceptions. You can buy these three winning stocks at a reasonable price right now. The best part? You can buy a share of each for less than $1,000 all-in.
Here they are:
1. Nvidia
AI chip company Nvidia(NASDAQ: NVDA) keeps going up. The stock has risen more than 500% in just the past three years. Yet, there's still an argument for buying it today. The company has dominated the rapidly growing market for powerful chips used in data centers to train and operate artificial intelligence (AI) models. Nvidia has enjoyed jaw-dropping top and bottom line growth since early last year, which has fueled the stock's returns.
Nvidia is reporting hot demand for Blackwell, its next-generation successor to the H100 series chip that has sold hand-over-fist for most of the past two years. The continued demand for Nvidia's AI chips has analysts estimating the company will grow its earnings by an average of 41% annually for the next three to five years as AI investments continue across the economy. The stock trades at a forward P/E of 48, which Nvidia's anticipated earnings growth justifies paying. Investors should look for warning signs of competitive pressure on Nvidia's near-monopoly on AI chips. Assuming Nvidia stays dominant, it's hard not to like the stock here.
2. Meta Platforms
Social media giant Meta Platforms(NASDAQ: META) is becoming a potential AI juggernaut thanks to its co-founder and CEO Mark Zuckerberg, who has made AI a top priority. Not only has Meta developed and integrated AI into its business, including AI tools for digital ads (Meta's core business), but the company has open-sourced Llama, its large language model, and stockpiled AI chips to create top-of-the-market computing capabilities.
The great thing about Meta is that AI is arguably secondary to the company's fantastic core business. Its family of social media apps, Facebook, Instagram, WhatsApp, and Threads, has 3.27 billion daily active users, an audience that forms the basis to sell billions of dollars of advertising. Meta stock trades at 27 times its estimated 2024 earnings, and analysts believe the company will grow earnings by 19% annually over the next several years. That's a solid price for a great business with additional upside if it can further monetize its AI ambitions.
3. SentinelOne
Cybersecurity company SentinelOne(NYSE: S) uses AI technology to protect customers autonomously from threats and malicious actors. Cutting-edge technology is a competitive advantage in security, and SentinelOne has repeatedly stood out in third-party evaluations. That has helped drive strong revenue growth, with sales growing by 33% year over year in Q2, among the fastest growth rates in its peer group.
SentinelOne recently secured a blockbuster partnership with Lenovo to integrate its security platform into new personal computer shipments. This partnership should add fuel to SentinelOne's already strong growth momentum.
SentinelOne isn't profitable yet, which the market has seemingly held against it, given that the stock trades at a lower enterprise value-to-revenue multiple than its peers. However, SentinelOne's financials are rapidly improving as revenue grows, and the company has a stockpile of cash and zero debt on its balance sheet.
It could be a matter of time before SentinelOne's growth and improving fundamentals earn more love from Wall Street. This is an opportunity to buy the stock before then.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,285!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,456!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $411,959!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of October 14, 2024
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. Justin Pope has positions in SentinelOne. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.
