The Best Stocks to Invest $1,000 in Right Now | The Motley Fool

Starting off a portfolio with $1,000 may seem overly modest, but it can be a great place to begin. The more challenging task is finding stocks that can turn $1,000 into a significantly larger sum without incurring excessive risk.

Admittedly, investing in individual stocks is not entirely risk-free. Nonetheless, staying with established companies dramatically reduces investor risks, and the undervaluation in these three companies positions investors for gains as they realize more of their growth potential.

1. Alphabet

One of the more compelling bargains on the market today is Google’s parent company, Alphabet (GOOGL 0.78%) (GOOG 0.66%).

Despite being an early pioneer in AI, Alphabet appeared to be caught flat-footed when OpenAI introduced its generative AI-driven version of ChatGPT. The company released Google Gemini soon after, but Google Search remains under threat from competition for the first time in decades.

Also, Alphabet still generates around 74% of its revenue from digital advertising. Since its generative AI directs users to websites less often, it has resulted in fewer opportunities to generate ad-driven income.

Google Cloud now accounts for 14% of the company’s revenue. Moreover, its autonomous driving company, Waymo, could become a revenue source as self-driving cars become more prevalent. Alphabet also holds $95 billion in liquidity and generated almost $75 billion in free cash flow over the trailing 12 months, giving the company tremendous resources to compete in other business ventures.

Amid these struggles, Alphabet stock trades for just 21 times earnings. Given its optionality and non-ad revenue sources, its growth is likely not yet complete, meaning it could still experience market-beating growth for years to come.

2. Uber

Investors know Uber Technologies (UBER 0.03%) as the leader in ridesharing and one of the leading delivery companies. The company has established a globally recognized brand in these industries, as well as its freight business.

Although the mobility and delivery segments remain on a long-term growth trajectory, Uber’s real future may lie in autonomous vehicles. The company has partnered with autonomous vehicle companies such as Alphabet’s Waymo and the General Motors subsidiary Cruise.

Uber provides a platform to arrange rides and bring customers to these companies, allowing its partners to focus on improving autonomous driving and, to a lesser extent, air taxis, such as those being developed by companies like Joby Aviation.

Thanks to that emerging industry, Straits Research believes the autonomous vehicle will take the global ridesharing market to a 21% compound annual growth rate (CAGR) through 2033, reaching a size of $918 billion.

Uber earned $44 billion in revenue in 2024, although it generated just over half of that from ridesharing, suggesting that Uber will likely claim a significant portion of the anticipated growth over the next few years.

A one-time income tax benefit makes its 16 P/E ratio a deceptive valuation measure. Nonetheless, with a 25 forward P/E ratio, Uber could be an excellent choice for both growth and value investors seeking outsize returns.

3. Sea Limited

Sea Limited (SE 0.85%) is not a household name for American investors, as its e-commerce and fintech arms operate primarily in Southeast Asia. However, for those who missed out on Amazon, the tech conglomerate may serve as a second-chance stock.

The company’s Shopee segment is the leading e-retailer in Southeast Asia, a region with a population of around 650 million. Since its failed attempts to sell in most of its non-Asian markets, it has taken a page from Amazon’s playbook and invested heavily in logistics.

Additionally, fintech giant Monee adds mobile payment options to cash-focused consumers in the developed world, while gaming company Garena had the world’s most downloaded mobile game in 2024, Free Fire.

While Monee has remained consistently strong, Shopee’s growth has recovered amid its investments in logistics. Furthermore, after several quarters of revenue declines, Garena has recovered amid Free Fire‘s renewed popularity.

With all three segments in growth mode, Sea Limited’s revenue rose 30% year over year in the first quarter of 2025, far above the 5% annual growth in the first quarter of 2023.

This has led to an improved valuation, and while its P/E ratio of 112 may appear pricey, the forward P/E of 40, which is based on predicted growth, arguably makes this stock a bargain. Considering that its $94 billion market cap is a small fraction of Amazon’s $2.4 trillion market cap, it appears positioned for considerable growth from current levels.