Here are seven of the best ways to invest $1,000.
If you have an extra $1,000 sitting in a savings or checking account, one of the best ways to earn a return on that money is to invest in the stock market. If you’re new to investing, buying a low-cost, diversified S&P 500 exchange-traded fund, or ETF, such as the SPDR S&P 500 ETF Trust (ticker: SPY), is a relatively low-risk place to start. However, if you’d rather begin building your own stock portfolio from scratch, here are seven of the best blue-chip stocks to buy with $1,000 that have “buy” ratings from the Morningstar analyst team.
Microsoft Corp. (MSFT)
Microsoft is the world’s largest software company and owner of the Windows operating system, Office business software suite and Azure cloud computing service. Analyst Dan Romanoff says Microsoft has successfully transitioned from a traditional perpetual license business model to a subscription model. In addition, he says Microsoft has done an excellent job upselling customers higher-priced versions of Office 365. Romanoff says Azure is the core of Microsoft’s long-term growth thesis. Azure generated 45% revenue growth in fiscal 2022, an impressive rate for a $45 billion business. Morningstar has a “buy” rating and $352 fair value estimate for MSFT stock, which closed at $240.74 on Oct. 3.
Alphabet is one of the world’s largest online search and advertising companies and is the parent company of Google and YouTube. Analyst Ali Mogharabi says Alphabet dominates the online search market, which serves as a major revenue growth and cash flow source. Mogharabi says Google will maintain its leadership position in the search business, but anticipates YouTube will become an increasingly larger contributor to Alphabet’s overall revenue and earnings numbers. In addition, Mogharabi says several of Alphabet’s many moonshot technology investments have significant upside potential. Morningstar has a “buy” rating and $169 price target for GOOGL stock, which closed at $98.64 on Oct. 3.
Amazon.com Inc. (AMZN)
Amazon is the market leader in e-commerce and public cloud services. Romanoff says Amazon’s AWS cloud business has been a consistent growth source, but its retail business also bounced back impressively in the most recent quarter. Looking ahead, Romanoff says Amazon’s difficult year-over-year comparisons should start to ease given Amazon is now more than a year removed from its peak pandemic growth. Romanoff says Amazon benefits from a number of competitive advantages in its key markets and continues to gain market share from legacy retailers. Morningstar has a “buy” rating and $192 fair value estimate for AMZN stock, which closed at $115.88 on Oct. 3.
Berkshire Hathaway Inc. (BRK.A, BRK.B)
Berkshire Hathaway is a holding company that has a diverse portfolio of public and private companies that is managed by Wall Street legend Warren Buffett. If you have just $1,000 to put into the stock market, you can essentially buy shares of Berkshire stock and put Buffett in charge of your portfolio. Analyst Greggory Warren says Berkshire’s diversification and focus on high-quality investments make the stock an excellent defensive play and give it one of the most attractive risk-adjusted return profiles in the financial sector. Morningstar has a “buy” rating and $357 fair value estimate for BRK.B stock, which closed at $272.80 on Oct. 3.
Visa Inc. (V)
Visa is a global credit card leader and owner of the world’s largest electronic payment network. Analyst Brett Horn says Visa is currently experiencing particularly high growth thanks to the ongoing post-pandemic rebounds in cross-border payments and travel spending. Constant currency cross-border payment volume, excluding intra-Europe transactions, was up 48% in the second quarter. Horn says Visa is a rare blue-chip investment and established market leader that still has strong long-term growth prospects thanks to the secular shift away from cash and toward electronic payments. Morningstar has a “buy” rating and $229 fair value estimate for V stock, which closed at $181.65 on Oct. 3.
Meta Platforms Inc. (META)
Meta Platforms is a market leader in social media and online advertising and is the parent of Facebook and Instagram. Meta shares are down almost 60% year to date after Facebook reported its first-ever drop in daily active users in February. Meta also reported its first-ever quarter of negative revenue growth in the second quarter and guided for negative revenue growth in the third quarter as well. Despite the near-term challenges, Mogharabi says Meta will return to double-digit revenue growth by the second half of 2023. Morningstar has a “buy” rating and $346 price target for META stock, which closed at $138.61 on Oct. 3.
JPMorgan Chase & Co. (JPM)
JPMorgan Chase is one of the world’s largest banks and financial services companies. Analyst Eric Compton says JPMorgan is a market leader in investment banking, commercial banking, credit cards, retail banking, and asset and wealth management. In addition, he says its combination of scale, diversification and risk management is virtually unmatched among its big bank peers. Compton says JPMorgan is at the beginning of its next expansion cycle and will gain further market share in coming years as it branches out into new endeavors and payment verticals. Morningstar has a “buy” rating and $149 fair value estimate for JPM stock, which closed at $107.73 on Oct. 3.
7 of the best stocks to buy with $1,000:
— Microsoft Corp. (MSFT)
— Alphabet Inc. (GOOG, GOOGL)
— Amazon.com Inc. (AMZN)
— Berkshire Hathaway Inc. (BRK.A, BRK.B)
— Visa Inc. (V)
— Meta Platforms Inc. (META)
— JPMorgan Chase & Co. (JPM)
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7 Best Stocks to Buy With $1,000 originally appeared on usnews.com
Update 10/04/22: This story was previously published at an earlier date and has been updated with new information.
