2 Ultimate Growth Stocks to Buy With $1,000 Right Now

Artificial intelligence (AI) is touted as one of the most important themes on Wall Street, and the technology sector continues to be a major beneficiary of this trend. Many AI-powered stocks have seen significant upward price movements in the past couple of years. Since AI technologies are driving a paradigm shift across sectors, companies leveraging them will continue to see share prices grow in the long run.

Since 2008, the U.S. stock market has demonstrated remarkable resilience, despite changes in political administrations, fiscal policies, economic indicators, and international relationships.

Against this backdrop, it makes sense for investors to start picking small stakes in stocks like Advanced Micro Devices (NASDAQ: AMD) and Microsoft (NASDAQ: MSFT), even though they are currently facing headwinds. If investors have $1,000 not required to pay bills or for other contingencies, buying either of these stocks can prove to be a smart move now.

1. Advanced Micro Devices

Semiconductor giant Advanced Micro Devices' shares tanked after the company released third-quarter fiscal 2024 results on Oct. 29. While the company's revenues surpassed analysts' expectations and earnings came in line with consensus estimates, investors were disappointed with its forward guidance.

Investors are concerned about AMD's ability to capture a significant share in the global AI market, amid a tight supply environment. AMD's management expects the AI accelerator target addressable market for its data center GPU segment to grow annually by 60% to $500 billion in 2028. Yet investors remain worried about the current momentum of its AI business, as the company increased revenue guidance for its data center GPU revenues from $4.5 billion to just $5 billion for 2024.

Despite these challenges, there are still many reasons to like AMD stock.

First, AMD's data center segment posted an impressive 122% year-over-year jump in revenues to $3.5 billion in the third quarter. AMD attributes this mainly to robust enterprise and cloud demand for its EPYC CPUs. The EPYC line of processors is increasingly considered to be "the CPU of choice for the modern data center," and it's being used to power multiple services including Netflix, Microsoft Office 365, and Meta Platforms' Facebook.

Second, contrary to investor opinion, AMD's AI accelerator business is all set to grow rapidly in the coming quarters. The company is seeing healthy adoption of its MI300X accelerators from cloud and AI players, as well as original equipment manufacturers.

Microsoft is already using MI300X for several services based on the family of GPT-4 models. Meta Platforms is also using MI300X chips to power its inferencing AI infrastructure at scale, including supporting live traffic for its Llama 405B model. AMD is also working to accelerate the pace of launch for next-generation AI accelerators, with the MI325X and MI350 series scheduled for launch in 2025 and 2026, respectively.

Third, AMD's client segment also saw robust growth, with revenues jumping 29% year over year to $1.9 billion in the third quarter. The launch of the Ryzen 9000 series processors pushed up sales of the company's desktop channel.

AMD is also seeing positive traction for its Ryzen AI 300 series processors from AI PCs. Furthermore, with Windows 10 support ending in 2025 and the emergence of new AI PCs, a new PC refresh cycle can further boost demand for AMD's client processors.

Considering these tailwinds and the recent correction in share prices, AMD seems a smart pick now.

2. Microsoft

Technology titan Microsoft's shares also took a beating after releasing first-quarter fiscal 2025 results (ending Sept. 30), despite sales and earnings beating consensus analyst estimates. The company's lower-than-anticipated year-over-year revenue guidance for its Azure business -- around 31% to 32% -- for the second quarter seems to have disappointed investors. Nevertheless, the company remains an attractive pick for the astute investor.

Azure cloud computing accounted for 20% of the worldwide cloud infrastructure market in the third quarter of 2024. Azure and other cloud services revenues soared by a healthy 33% year over year in the third quarter of 2024 (ending Sept. 30), with AI services contributing to roughly 12 percentage points of this growth. Microsoft has introduced new Cobalt 100 virtual machines (VMs) that help power general workloads at enterprises with up to 50% better price performance.

The company is also the first cloud provider to implement Nvidia's Blackwell system with its GB200-powered AI servers. Not surprisingly, Azure is benefiting from healthy consumption trends, as enterprises continue to migrate their on-premise workloads to the cloud.

Furthermore, Azure has also witnessed an increase in the total number of $10 million-plus and $100 million-plus contracts. This implies that customers are entering into long-term commitments with Azure, which ensures higher revenue visibility for Microsoft.

The partnership with ChatGPT developer OpenAI has also proved pivotal for Microsoft, enabling the company to rapidly build and scale AI-powered businesses. Microsoft estimates its AI-powered businesses (which mainly include Copilot offerings and Azure AI) to be on track to surpass $10 billion in annual revenue run rate. Since these AI offerings are being rapidly adopted by enterprises in real-time applications (and not merely for training purposes), the company considers its AI revenues to be sustainable and of high quality.

Microsoft has established a broad Azure data center footprint across 60 regions worldwide. The company also is aggressively investing capital to build next-generation cloud-native AI infrastructure, and is also optimizing its technology stack for AI workloads, to further capitalize on the long-term AI demand. Hence, while the company is currently facing some AI capacity constraints, it expects to see accelerated growth for its AI businesses starting from the second half of fiscal 2025.

It is undeniable that $20 billion quarterly capex spending is a high expense even for a $3 trillion giant like Microsoft. However, thanks to its broad ecosystem of stable, high-growing businesses, the company has been successfully growing its top line and bottom line at double digits in the past years. Plus, the company has also returned a hefty $9 billion to shareholders as dividends and share repurchases in the third quarter.

The robust AI and cloud tailwinds, coupled with Microsoft's healthy financials, make the company an excellent choice this November.

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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. Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, Netflix, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.