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

Investing in growing companies with large customer bases is a smart way to find long-term winners to buy and hold. Dominant companies that benefit from a competitive advantage can compound in value over many years, helping investors grow their wealth.

If you're starting with less than $1,000 to invest, two competitively positioned businesses worth considering right now are Netflix (NASDAQ: NFLX) and Microsoft (NASDAQ: MSFT).

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Netflix

Netflix stock hit a high of $134 last year and has since fallen about 31%. What matters is that the business is still performing well. Netflix now has more than 325 million paying members, and viewing trends remain healthy as the company continues expanding its content lineup.

The company's massive membership base enables it to spend billions on new films and shows each year, which, in turn, help retain and attract more members. It's a powerful growth flywheel. Last year, Netflix spent more than $17 billion on content, and that amount will continue to grow. It's an advantage that the company can spend this much to expand its content library while still earning $11 billion in net income on $45 billion in revenue.

Engagement is also trending up. In the second half of 2025, members watched 96 billion hours of content, driven largely by exclusive releases, including Netflix originals like KPop Demon Hunters and Stranger Things. This matters because Netflix's large customer base generates lots of data. Past viewing behavior across hundreds of millions of users helps the company decide what to produce, how to promote it, and what best drives retention.

Netflix is one of the strongest and most profitable brands in entertainment. After the pullback, the stock trades at 30 times this year's earnings estimate. That looks expensive, but it's supported by strong earnings growth. Analysts expect roughly 22% annualized earnings growth over the next few years, which could lift the stock.

Microsoft

Microsoft is one of the most widely used software and cloud service providers. It has more than 450 million paid seats (licensed users) in Microsoft 365 on the commercial side. Wide usage of its products provides recurring revenue and helps fuel consistent cash flow -- a strong foundation for shareholder returns over time.

The recent tech sell-off has pushed the stock down about 31% from its high, but the underlying business remains strong. Microsoft grew revenue 17% year over year last quarter, driven by higher cloud usage as customers adopt Copilot artificial intelligence (AI) tools and use Azure to build and deploy applications.

AI agents are the future of software, and Microsoft is positioning its business to meet this demand. Microsoft's Foundry and Fabric platforms aim to give customers broad model choice and the ability to connect agents to real-time data. Fabric's annual revenue is now more than $2 billion, up 60% year over year.

Microsoft's profitability supports aggressive reinvestment in expanding its AI capabilities. Over the last year, the company produced $119 billion in net income on $305 billion in revenue, helping fund additional data center capacity to meet AI demand. With analysts projecting annualized earnings growth of about 13%, the stock is reasonably priced at 23 times forward earnings.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Netflix. The Motley Fool has a disclosure policy.