When it comes to investing, a $3,000 position may not sound like much. While it's not enough to deploy into multiple individual stocks, it's enough to allow one to take $1,000 positions in three different stocks, and that includes artificial intelligence (AI).
Due to a recent pullback in stocks, many AI stocks are on sale. Thus, now is likely an excellent time to take starter positions, and these stocks could serve investors well.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
When it comes to AI investing, it's likely too early to count out Google parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Alphabet first began using AI in 2001, and since then, it has been a pioneer in the technology.
It was only with OpenAI's generative AI breakthrough in 2023 that some began to doubt Alphabet's strength in the AI market. Although the company has followed up with Google Gemini and plans to spend $75 billion in capital expenditures (CapEx) in 2025 alone, Alphabet has not eased doubters' fears.
Nonetheless, the Google parent could easily rebound. Alphabet held about $96 billion in liquidity at the end of 2024, and it generated around $73 billion in free cash flow, a figure that does not include CapEx expenses. Those results show that it can afford such investments. Additionally, its massive ad business continues to grow revenue at double-digit rates, and the 31% revenue increase in Google Cloud shows that it's diversifying its revenue sources.
Investors should also remember that amid doubts, Alphabet stock has risen since OpenAI's generative AI breakthrough in 2023. Moreover, its price-to-earnings (P/E) ratio of 19 sits at a multi-year low, making it increasingly likely that now is an opportune time to add shares of this internet giant.
Facebook parent Meta Platforms (NASDAQ: META) built its success on becoming the dominant social media stock and creating a wildly successful digital ad business based on that.
However, with about 3.35 billion users logging on to a Meta-owned social media site daily, its sites seem to be approaching global saturation. Thus, after failing to draw investor interest through the metaverse, the company has pivoted into AI.
It has developed a generative AI assistant that helps Meta users generate images, personalize experiences, and use open-source AI. It just released Llama 4, its latest family of large language models, and a paid subscription service is also in the works. Thanks to sites such as Facebook and Instagram, Meta accumulated a treasure trove of data on much of the population that may give it a competitive advantage.
It holds about $78 billion in liquidity, not including the $52 billion it generated in free cash flow, leaving it with tremendous optionality regarding AI investing. With that, it announced plans to invest $60 billion to $65 billion in CapEx to stay competitive in the AI race.
Like Alphabet, Meta stock has risen steadily since Open AI's generative AI release. With a P/E ratio of 21, investors may want to consider this stock while it trades at a reasonable valuation.
Amazon (NASDAQ: AMZN) has been adept at staying at the forefront of tech innovation, and AI is no exception. The company's cloud computing arm, Amazon Web Services (AWS), pioneered the cloud industry and remains the leading provider. However, since the cloud facilitates AI functionality in many cases, Amazon had to become adept with the technology to stay relevant in its field.
The e-commerce side of the business also uses AI. The technology personalizes customer experiences and improves the content and advertising appearing on its platform. In its third-party seller business, AI helps sellers streamline operations and provides overviews to evaluate a seller's performance.
Like its mega-tech peers, Amazon also plans to spend heavily on capital expenditures. It implied that it would spend $100 billion, most of which would go to AI. Investors should also like that it can probably afford these investments because it holds $101 billion in liquidity and generated $38 billion in free cash flow in 2024.
Indeed, Amazon stock has dropped dramatically in recent weeks amid the market sell-off. Nonetheless, investors should note that its P/E ratio has fallen to 31, a multi-year low for Amazon stock. That factor likely makes now a good time to add shares while the stock is comparatively inexpensive.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. 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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.