Here are seven of the best ways to invest $1,000 right now.
If you have an extra $1,000 sitting in a savings account, one of the best ways to put that money to work is to invest in the stock market. If it’s the first $1,000 you’ve ever invested, buying a low-cost, diversified S&P 500 exchange-traded fund, such as the SPDR S&P 500 ETF Trust (ticker: SPY) is a relatively low-risk way to start investing in the market. But if you’d rather build your own stock portfolio from scratch, here are seven blue-chip stocks to buy now with $1,000 that have “buy” ratings from the Morningstar analyst team.
Microsoft Corp. (ticker: MSFT)
Microsoft is the world’s largest software company and is best known for its Windows operating system, its Office 365 subscription service and its Azure cloud computing business. Microsoft’s gaming segment also owns Xbox, and the company made a huge splash in January by announcing a proposed deal to purchase video game developer Activision Blizzard Inc. (ATVI) for $68.7 billion. Morningstar analyst Dan Romanoff says Microsoft’s 20% revenue growth in the fiscal second quarter, including 46% Azure growth and 45% Dynamics 365 growth, suggests Microsoft’s 2022 pullback is a buying opportunity. Morningstar has a “buy” rating and a $352 fair value estimate for MSFT stock, which closed at $311.21 on Feb. 9.
Alphabet is the parent company of Google and YouTube and is the world’s leading online search provider and digital advertising company. Alphabet recently reported fourth-quarter earnings and revenue beats, and analyst Ali Mogharabi says the company is demonstrating strength on all fronts. Alphabet also reported further YouTube monetization, accelerating Google Cloud growth and announced a 20-for-1 stock split, which is coming in July. Mogharabi projects an overall revenue growth slowdown in 2022 but says YouTube and cloud revenue growth will stay in the double-digit percent range. Morningstar has a “buy” rating and a $3,600 fair value estimate for GOOGL stock, which closed at $2,831.84 on Feb. 9.
Amazon.com Inc. (AMZN)
Amazon is the market share leader in e-commerce retailing and cloud computing services, two markets Romanoff says the company “dominates.” He says Amazon’s size and scale provide numerous competitive advantages in e-commerce, including an unmatched selection of low-priced goods. Even at its massive $1.6 trillion market cap, Romanoff says Amazon is still gaining retail market share due to the secular shift to online shopping. He says Amazon’s Prime subscription is its “secret sauce,” providing a high-margin stream of recurring revenue. Morningstar has a “buy” rating and a $4,100 fair value estimate for AMZN stock, which closed at $3,223.79 on Feb. 9.
Meta Platforms Inc. (FB)
Meta Platforms is the owner of social media platforms Facebook, Messenger, Instagram and WhatsApp. Meta shares tumbled more than 26% in early February when the company issued weaker-than-expected 2022 guidance and said changes that Apple Inc. (AAPL) made to its iPhone privacy policies will result in a $10 billion revenue loss for Meta this year. However, Mogharabi says e-commerce is a major source of future revenue growth for Meta and its virtual reality business should benefit from both hardware sales and revenue sharing with merchants and content creators. Morningstar has a “buy” rating and a $400 fair value estimate for FB stock, which closed at $232 on Feb. 9.
Walt Disney Co. (DIS)
Walt Disney is a diversified media and entertainment company that operates film and TV studios and theme parks. Analyst Julie Utterback says Disney’s Disney+, Hotstar, Hulu and ESPN+ direct-to-consumer subscription streaming services are clear signs that the company is successfully evolving. Utterback says Disney+ will continue to benefit from new content created by Disney and Fox studios and from Disney’s deep library of past content. Specifically, she says Disney has successfully arranged the Marvel and Star Wars universes to create webs of interconnected films and product tie-ins. Morningstar has a “buy” rating and a $170 fair value estimate for DIS stock, which closed at $147.23 on Feb. 9.
Adobe Inc. (ADBE)
Adobe is a creative content software company that also specializes in marketing automation and e-commerce applications. Adobe shares are down more than 17% since its earnings call on Dec. 16, and much of that sell-off occurred after the company reported what Romanoff describes as “messy” billings numbers and light 2022 guidance. Romanoff says market expectations were likely too high for Adobe prior to the event, but the stock’s current price reflects an overly pessimistic outlook given Adobe’s market dominance, revenue growth and expanding product portfolio. Morningstar has a “buy” rating and a $630 fair value estimate for ADBE stock, which closed at $521.75 on Feb. 9.
Salesforce.com Inc. (CRM)
Salesforce.com is the largest customer relationship management, or CRM, software company. Romanoff says the more than 10% drop in Salesforce shares so far in 2022, amid a broad market rotation out of high-growth tech stocks, makes Salesforce shares even more attractive from a valuation perspective. He says Salesforce has experienced robust growth throughout the pandemic, which drove demand for remote CRM services. Romanoff expects digital transformation spending to continue in 2022 and beyond as businesses adapt to the new hybrid work environment. Morningstar has a “buy” rating and a $320 price target for CRM stock, which closed at $222.04 on Feb. 9.
7 best stocks to buy now with $1,000:
— Microsoft Corp. (MSFT)
— Alphabet Inc. (GOOG, GOOGL)
— Amazon.com Inc. (AMZN)
— Meta Platforms Inc. (FB)
— Walt Disney Co. (DIS)
— Adobe Inc. (ADBE)
— Salesforce.com Inc. (CRM)
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7 Best Stocks to Buy Now With $1,000 originally appeared on usnews.com
Update 02/10/22: The story was previously published at an earlier date and has been updated with new information.
