These elite tech stocks could significantly build your wealth in the years to come.
If you have some extra cash you don’t need for paying bills or reducing debt, now could be a great time to invest in promising growth stocks. The new bull market is only about one year long, and since rising markets historically carry on much longer than the occasional market dip, there could be several years of handsome returns ahead.
Here are two outstanding growth stocks you can buy for less than $1,000.
1. Meta Platforms
Facebook and Instagram owner Meta Platforms (META 0.20%) has seen its share price soar over the last 12 months, rising 57% and almost doubling the return of the Nasdaq Composite. But it could hit more new highs over the next year.
Meta’s investments in artificial intelligence (AI) are starting to show huge potential to boost ad performance across its family of apps. Meta AI is now integrated into WhatsApp, Messenger, Instagram, and Facebook. It’s basically a smart assistant that can answer complex questions. Over the long term, Meta could make money off this feature with ads or other content integrated with user interactions.
AI-driven recommendation systems are already having a big impact on the user experience, which is benefiting Meta’s advertising business. This already large social media giant reported a revenue increase of 27% year over year in the first quarter.
Investors have high expectations for the company’s growth, which is reflected by its stock performance. Meta has more than 3.2 billion daily users across its family of apps, creating a magnet for advertisers. The company has a record of making large investments in new technologies that end up making a big difference for shareholders over time, and the investments in AI infrastructure could lead to the same outcome.
The stock trades at a very reasonable forward price-to-earnings (P/E) ratio of 24. If it’s able to meet the consensus Wall Street forecast of 18% annualized earnings growth over the next several years, the share price could double within the next five years, assuming it’s still trading at the same valuation.
2. Alphabet
Shares of Alphabet (GOOGL -0.02%) (GOOG 0.10%) recently were up 47% over the last year, well outpacing the broader market. Alphabet is benefiting from a strong digital advertising market, and like Meta Platforms, its investments in AI are strengthening the business.
Alphabet’s most important advantage is the 2 billion monthly users that use its products, such as Gmail, YouTube, and Search. It dominates the online search market and has the most watched video-streaming platform in YouTube. Revenue, which mostly comes from advertising across these services, rose 15% year over year in the first quarter.
Alphabet has been investing in AI technology for years. The company launched its smartest AI model yet with Gemini last year, and the Google DeepMind team is working on other models that could make its products smarter and more useful for people for years to come.
AI is essential to everything Alphabet does, including powering content recommendations and the Smart Bidding tool in the ad business. But new AI services should continue to drive growth in its cloud computing business, with more than 60% of funded generative AI start-ups choosing Google Cloud.
The stock trades at a reasonable forward P/E of 24. Assuming it continues to trade at the same valuation, the share price could also double in value in five years based on Wall Street’s annualized earnings growth estimate of 17%.
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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Ballard has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet and Meta Platforms. The Motley Fool has a disclosure policy.
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