The Best Stocks to Buy With $1,000 Right Now

Three years into this bull market run, the S&P 500 is still hovering close to new highs. But some top stocks have sold off recently, offering the chance to buy them at attractive valuations. These are still outstanding businesses trading at appealing valuations.

If you’ve got extra cash to commit to a long-term investment strategy, Microsoft (MSFT 1.92%) and Visa (V +0.65%) look like compelling buys right now. Both slipped year to date, but neither company is taking its foot off the gas. Each is pushing deeper into the biggest opportunities in its industry.

Here’s why these two blue chip leaders could be smart buys on the dip.

Image source: Getty Images.

Microsoft

Shares of Microsoft are trading 28% from their previous high, making it a top growth stock to consider buying right now. The software giant has benefited from integrating artificial intelligence (AI) tools across its services, including the Azure enterprise cloud platform, Microsoft 365, and Copilot.

The stock’s dip reflects concerns that agentic AI tools could intensify competition. However, Microsoft has built decades-long relationships with its customers because of the security and reliability it provides.

In the recent quarter, revenue from Microsoft Cloud, including Microsoft 365 commercial, Azure, and other services, grew 26% year over year to $51 billion. Microsoft says its AI business is already larger than some of its most widely used products that took decades to grow.

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NASDAQ: MSFT

Microsoft

Today’s Change

(-1.92%) $-7.48

Current Price

$381.54

Key Data Points

Market Cap

$2.8T

Day’s Range

$380.12 - $386.79

52wk Range

$344.79 - $555.45

Volume

1.7M

Avg Vol

34M

Gross Margin

68.59%

Dividend Yield

0.91%

Another important sign that investors are underestimating Microsoft’s competitive strength is the growth in its productivity software suite. It reported a 160% increase in the number of licensed users (seats) using Microsoft 365 Copilot last quarter.

The stock’s 23 forward price-to-earnings (P/E) ratio is relatively attractive. This is as cheap as the shares have been since the bottom of the 2022 bear market.

Visa

Investing in a top credit card brand like Visa is almost like getting a royalty on millions of transactions that occur in the global economy every day. Visa benefits from high margins on the recurring fees it earns from the huge volume of payments across its network.

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NYSE: V

Visa

Today’s Change

(0.65%) $1.96

Current Price

$301.67

Key Data Points

Market Cap

$575B

Day’s Range

$299.08 - $302.90

52wk Range

$297.03 - $375.51

Volume

254K

Avg Vol

7.6M

Gross Margin

78.02%

Dividend Yield

0.84%

The stock is down 18% from its previous high, which could be discounting Visa’s competitive edge despite its latest results. Revenue grew 15% year over year last quarter, while payment volume rose 8% and processed transactions increased 9%.

Visa’s moat is built on its infrastructure and scale. Its network links roughly 175 million merchants, enabling the company to securely and efficiently process more than 31 billion credit card transactions each quarter.

One area where investors could be underestimating Visa is stablecoins – a market expected to exceed $2 trillion by 2028, according to Morgan Stanley. Visa is positioning itself to serve as the bridge between fiat money and stablecoins, according to research from The Motley Fool. Visa reported that its stablecoin settlement volume reached an annualized run rate of $4.6 billion last quarter, indicating an emerging growth opportunity.

Investors will need to keep an eye on how AI reshapes software and payments, but the capabilities of the category leaders like Microsoft and Visa may be greatly underestimated. With a forward P/E of 24, Visa shares look like a compelling buy right now.