3 No-Brainer Artificial Intelligence (AI) Stocks to Buy With $500 Right Now

These AI stocks still have a lot of room to keep growing.

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This article first appeared on our U.S. website and was written by Adam Levy.

It’s not too late to start investing in artificial intelligence (AI) stocks. While fervor around new generative AI developments has sent many tech stocks zooming higher, there are still plenty of opportunities to invest in the space.

Spending on generative AI hardware, software, and development will increase from $67 billion last year to $1.3 trillion in 2032, according to estimates from Bloomberg Intelligence. That leaves a lot of room for companies to keep growing.

While the early winners may not be able to keep up the pace, there are several companies building unique AI capabilities that look attractive in today’s market. And you can get started investing in them with as little as $500.

Here are three no-brainer AI stocks to buy right now.

1. Adobe

Adobe (NASDAQ: ADBE) is the leading provider of professional-level design and document management software. It also has a growing suite of tools for digital marketers that includes tools like Photoshop or its Acrobat PDF reader.

The company introduced its Firefly AI across its creative cloud software package, which makes creating and editing photos and videos easier than ever. Thanks to Adobe’s unique access to proprietary data and its growing catalog of stock images, it can provide excellent training material so its AI can perform more accurately than competitors.

Adobe is using Firefly to draw more users to its free version of its creative software suite. And once it gets them using the software, it’s improving conversions into paid users. Meanwhile, paid users are spending more to get more access to advanced AI features.

Adobe is copying the playbook across its other software packages, incorporating generative AI across practically every application and solution it offers.

Adobe has a strong competitive advantage thanks to the network effect. It’s the industry standard, which means sharing files with others often requires access to Adobe’s software. There’s also a lock-in effect, whereby creatives and managers are hesitant to switch to another tool, which may be inferior.

Shares currently trade around $500, or 25x analysts’ estimates for fiscal 2025 earnings. That’s a fair price to pay for a company that’s growing quickly, benefits from steady cash flow from subscriptions, and could see strong revenue gains from advances in AI.

2. Salesforce

Salesforce (NYSE: CRM) provides the leading customer-relationship management software service. It helps businesses manage their sales leads and opportunities with its core software. It expands on that with software suites for customer service, marketing teams, and others. It ties all of its products together with its new Data Cloud, which provides a “single source of truth,” as management calls it, bringing together all of the data generated by its services into a single unified platform.

Data Cloud underpins Salesforce’s efforts in artificial intelligence. CEO Marc Benioff says the biggest differentiating factor in generative AI isn’t the models you work with, but the data you train them with. Salesforce has access to a huge amount of proprietary data thanks to its position as the leading enterprise customer relationship management (CRM) software.

Salesforce’s Einstein Copilot can help employees accomplish tasks like closing sales and filing customer support tickets faster and easier, and it’s adding more and more features every quarter. That could help fuel growth in sales for more access to AI features or Data Cloud.

In the meantime, Salesforce should see strong free cash flow as it benefits from similar competitive advantages as Adobe. It has a solid network of users that build applications on Salesforce’s platform, locking customers into the ecosystem. Additionally, it’s unlikely a manager will switch away from the market-leading software.

Shares sold off after disappointing first-quarter earnings and a weak outlook. They currently trade around $240, which is good for a forward P/E of 24.4x. With strong free cash flow supporting a significant share repurchase program and a new dividend, it’s worth a slight premium to the market. After the recent sell-off, you could afford two shares of the stock with your $500.

3. Meta Platforms

Meta Platforms (NASDAQ: META) is spending huge amounts of cash on developing and training leading-edge generative AI. It has good reason. It uses AI in just about everything it does with a long history of algorithmically ranked and recommended content. AI powers its massive advertising business, and CEO Mark Zuckerberg sees big opportunities in AI for the 3.2 billion people who use at least one of its apps — Facebook, Instagram, WhatsApp, or Messenger — every day.

Alongside its first-quarter earnings release, management increased its outlook for capital expenditures, which will mostly go toward building AI data centers and procuring the expensive chips needed to train large language models. The company now expects to spend between $35 billion and $40 billion this year. Investors initially balked at that outlook, selling shares off, but they’ve since bounced back to trade near Meta stock’s all-time high.

While Zuckerberg warned that direct monetization of its AI efforts is still years away, Meta’s uniquely positioned to incorporate its AI efforts within its existing products to make them more valuable. Meta already uses AI to increase engagement on its apps; generative AI can produce even more features to engage users like advanced photo editing and making it easier for influencers to interact with fans. It also makes it easier for marketers to create and test new ad campaigns on its platform.

Meta shares currently trade around $500, putting its forward P/E around 25.3x. That price could be a steal considering analysts expect it to grow earnings per share at a compound annual rate of 30% over the next five years. That’s supported by a massive share repurchase program and its continued dominance of the digital advertising market. At this price, it’s a no-brainer.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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. Adam Levy has positions in Adobe, Meta Platforms, and Salesforce. The Motley Fool has positions in and recommends Adobe, Meta Platforms, and Salesforce. The Motley Fool has a disclosure policy.

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