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, such as the SPDR S&P 500 ETF Trust (ticker: SPY), is a relatively low-risk place to start.
[Sign up for stock news with our Invested newsletter.]
But if you’d rather build your stock portfolio from scratch, here are eight of the best blue-chip stocks to buy with $1,000 that have “buy” ratings from the Bank of America analyst team:
| Stock | Implied upside over July 6 closing price |
| Microsoft Corp. (ticker: MSFT) | -0.4% |
| Alphabet Inc. (GOOG, GOOGL) | 6.6% |
| Amazon.com Inc. (AMZN) | 20% |
| Nvidia Corp. (NVDA) | 18.8% |
| Meta Platforms Inc. (META) | 9.6% |
| Visa Inc. (V) | 13% |
| UnitedHealth Group Inc. (UNH) | 38.5% |
| Eli Lilly and Co. (LLY) | 7.9% |
Microsoft Corp. (MSFT)
Microsoft is the world’s largest software company and is well known for its Windows operating system, Office professional software suite and Azure cloud services business. Analyst Brad Sills says artificial intelligence is a huge long-term growth opportunity for Microsoft, which has made a sizable investment in ChatGPT developer OpenAI.
Sills says growing artificial intelligence and machine learning workloads could boost Azure demand and help reaccelerate its sales growth. In addition, he says Office 365 premium sales will increase Microsoft’s overall growth and potentially expand its earnings multiple. Bank of America has a “buy” rating and $340 price target for MSFT stock, which closed at $341.27 on July 6.
Alphabet is one of the world’s largest online search and advertising companies and is the parent company of Google and YouTube. Analyst Justin Post says Alphabet’s core businesses have performed relatively well in a difficult environment. Search growth was stable and YouTube revenue growth accelerated in the first quarter.
Alphabet recently launched its Bard AI chatbot in response to ChatGPT, and Post says Alphabet’s aggressive investment in AI technology and its access to troves of search data position the company as an early AI tech leader. Bank of America has a “buy” rating and $128 price target for GOOGL stock, which closed at $120.11 on July 6.
Amazon.com Inc. (AMZN)
Amazon is the market leader in e-commerce and public cloud services. Post says Amazon invested heavily in fulfillment and transportation infrastructure following the onset of the COVID-19 pandemic, doubling its number of warehouses and exceeding United Parcel Service Inc. (UPS) in delivery scale.
This investment cycle led to a downturn in efficiency, including metrics such as units sold per square foot. However, Post says these metrics began trending back in the right direction in the first quarter, and he says there is room for further margin expansion through 2024. Bank of America has a “buy” rating and $154 price target for AMZN stock, which closed at $128.36 on July 6.
[SEE: 9 Best Stocks for a Starter Stock Portfolio.]
Nvidia Corp. (NVDA)
Nvidia designs and sells high-end graphics and video processing chips used for desktop and gaming personal computers, workstations, and other advanced computing servers and supercomputers. A huge second-quarter guidance beat has Nvidia shares up 188.2% year to date through July 6, the best performance of any stock on this list.
Analyst Vivek Arya says Nvidia’s comprehensive platform makes it an AI technology leader, and the company has already partnered with over 1,600 generative AI startup companies and top cloud services providers. Arya says the AI growth story is just getting started. Bank of America has a “buy” rating and $500 price target for NVDA stock, which closed at $421.03 on July 6.
Meta Platforms Inc. (META)
Meta Platforms is a market leader in social media and online advertising and is the owner of Facebook, Instagram and other platforms. Post says Meta’s Messenger and WhatsApp messaging platforms provide tremendous long-term value as the company looks to integrate large language model technology, expand messaging capabilities and monetize its platforms by incorporating generative AI features.
Post says AI creates opportunities in audience targeting, online shopping, customer support, generative advertising and text-to-media solutions. Meta’s click-to-message ads are already generating a $10 billion annual revenue run rate. The company’s July 6 launch of its Twitter competitor, called Threads, could also be a growth catalyst. Bank of America has a “buy” rating and $320 price target for META stock, which closed at $291.99 on July 6.
Visa Inc. (V)
Visa is a global credit card leader and owner of the world’s largest electronic payment network. Analyst Jason Kupferberg says Visa’s cross-border payments business will continue to improve, driven by economic recovery in China. In addition, he says fiscal 2023 guidance is overly conservative, and Visa is generating impressive growth in its value-added services and new flows businesses.
Kupferberg says Visa has a track record of strong execution and a recession-resistant business model. It’s also benefiting from a secular shift away from cash and check payments. Bank of America has a “buy” rating and $270 price target for V stock, which closed at $238.88 on July 6.
UnitedHealth Group Inc. (UNH)
UnitedHealth is the largest U.S. managed health care firm, providing health plans and health care services to a wide range of customers. UnitedHealth shares are down 10.8% in 2023 through July 6, making it the worst-performing stock on this list.
Analyst Kevin Fischbeck says the weakness is a buying opportunity for long-term investors given UnitedHealth’s positive momentum across all of its segments. OptumInsight, a health care consulting firm subsidiary, is positioned to be UnitedHealth’s main growth driver, and the company has reported strong commercial membership growth and impressive customer retention rates. Bank of America has a “buy” rating and $650 price target for UNH stock, which closed at $469.36 on July 6.
Eli Lilly and Co. (LLY)
Eli Lilly produces brand-name prescription drugs to treat a wide range of medical conditions, including diabetes, cancer and neurological disorders. Analyst Geoff Meacham says Eli Lilly has a differentiated growth profile relative to peers, and its key value drivers include its diabetes drugs Mounjaro, Trulicity and Jardiance.
In addition, Meacham says psoriasis treatment Taltz, migraine drug Emgality and breast cancer treatment Verzenio will be positive growth contributors. He also projects more than $19 billion in annual sales by 2030 for the company’s investigational weight-loss drug tirzepatide, which is the active ingredient in its Food and Drug Administration-approved diabetes treatment Mounjaro. Bank of America has a “buy” rating and $500 price target for LLY stock, which closed at $463.21 on July 6.
More from U.S. News
9 Short Squeeze Stocks That Could Take Off in July
2023’s 10 Best-Performing Stocks
How Much Would $10,000 Invested in Apple Stock 20 Years Ago Be Worth Today?
8 Best Stocks to Buy Now With $1,000 originally appeared on usnews.com
Update 07/07/23: This story was previously published at an earlier date and has been updated with new information.
