The Best Stocks to Invest $50,000 in Right Now

Key Points

• Nvidia is partnering with OpenAI on the largest AI infrastructure project yet.

• Elon Musk just made a $1 billion bet on Tesla's future.

• Palantir has a wide competitive moat built on trust, switching costs, and tremendous cost savings for organizations.

• 10 stocks we like better than Nvidia ›

The tech boom has driven the Nasdaq Composite up 18% year to date. It's been a remarkable turnaround after the market sold off in March over worries around tariffs and how that might slow the economy. But recent earnings reports from large tech firms make it clear that the artificial intelligence (AI) opportunity is substantial.

The following companies are changing the world with their technology. If you have extra cash to invest, these are excellent stocks to profit from the AI boom.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

1. Nvidia

It's appropriate to list Nvidia (NASDAQ: NVDA) as the first stock to consider, since it makes the chips that make AI possible. The most powerful computers and data centers use Nvidia's graphics processing units (GPUs). Its data center segment makes up the bulk of its business, which grew 56% year over year in the most recent quarter.

Nvidia will continue to sell more chips. More advanced AI workloads simply require more computational power. Nvidia should remain the dominant supplier because it continues to maintain a breakneck pace of innovation. This makes it very difficult for competitors to jump ahead, and that's why Nvidia has led the GPU market for the past few decades.

For investors who have any doubt about Nvidia's competitive position, all they need to do is look at the recent $100 billion deal Nvidia just made with ChatGPT maker OpenAI. This is the largest AI infrastructure project in history, which will enable OpenAI to accelerate its AI development to make even better models over time.

"There's no partner but Nvidia that can do this at this kind of scale, at this kind of speed," OpenAI CEO Sam Altman said.

Nvidia also offers computing systems for training AI for physical products, including robots and autonomous vehicles. These are massive industries in the making, potentially stretching into the trillions of dollars in the coming decades.

Image source: Tesla.

2. Tesla

Tesla (NASDAQ: TSLA) stock has been volatile in recent years, but it has quietly risen about 250% since the end of 2022. The stock is starting to move higher as investors turn their attention to Tesla's autonomous future. It has spent billions in research and development for the past several years, preparing to scale its robotaxi fleet and eventually its Optimus robot, which promises to be an enormously valuable product.

While Tesla has been late to the party in the ridesharing market, its vision-based AI approach involving cameras will allow it to ramp very rapidly, and at lower costs, than competing services that are using more expensive LiDAR self-driving technology. Tesla can already produce close to 2 million cars per year at a profit, which is a major advantage.

Tesla's low cost structure is already allowing it to charge competitively low prices for its robotaxi service in Austin, Texas, and this advantage will widen once the CyberCab comes next year. Every detail of CyberCab has been designed to lower costs, including using robots to clean the inside of the car between rides.

Ark Invest's Cathie Wood believes Tesla stock will be worth $2,600 by 2029, which is based on the projected profit margin from the robotaxi service. However, CEO Elon Musk has repeatedly said over the past few years that its Optimus humanoid robot will be the company's most valuable product over time. Musk has set a target of making 1 million Optimus robots by 2030.

Musk recently acquired $1 billion worth of Tesla stock, with all the purchases made at share prices between $372 and $396. There are many reasons insiders sell shares, but there's only one reason they buy.

Image source: Getty Images.

3. Palantir Technologies

Nvidia and Tesla have the bases covered on chips and physical AI. Palantir (NASDAQ: PLTR) is by far the best software play in the AI market. It provides a deep layer of knowledge for a company to understand its operations better and make decisions about how to grow revenue and maximize profits.

Palantir uses an ontology-based approach, where it brings together multiple data sources that lead to decisive action. It provides deep intelligence, speed, and precision in a highly secure environment, which is why the U.S. government trusts Palantir with sensitive military data.

Many investors are hesitant to buy the stock because of its high valuation, but there are intangible aspects to Palantir's competitive advantage that valuation metrics can't measure. The deep level of trust that the government has in Palantir's ability to handle sensitive information is not easy to replicate. Palantir is also helping companies save millions in costs. A platform that is bringing this much value to organizations is not easy to value, especially since there are a lot of companies that haven't used Palantir yet. Management sees total revenue further accelerating in the second half of the year, with full-year revenue expected to grow 44% over 2024.

Once a company uses Palantir, it becomes deeply embedded in its operations. A company that is seeing tangible results from using the platform is not going to give it up that easily. And of course, Palantir's success will fuel more investment in its AI platforms to deliver even more value to customers over the long term.

Even as Palantir creates tremendous value for companies, it is also creating value for shareholders. The company's free cash flow has risen 765% over the last three years to $1.7 billion, making this a very profitable business already. Palantir has the potential to join the "Magnificent Seven" as one of the most valuable companies in the world over the long term.

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John Ballard has positions in Nvidia, Palantir Technologies, and Tesla. The Motley Fool has positions in and recommends Nvidia, Palantir Technologies, and Tesla. The Motley Fool has a disclosure policy.