2 Incredible Growth Stocks to Buy With $1,000

Key Points

• American Resources pivoted from coal to rare earth minerals just as domestic supply chain policies created unprecedented demand for critical materials.

• Freshworks grew revenue to $200 million quarterly with improving margins, yet trades below 2024 levels as investors flee unprofitable software stocks.

• Splitting $1,000 between these contrasting plays strikes a balance between speculative commodity upside and steady SaaS growth at a discount.

• 10 stocks we like better than American Resources ›

You don't need to be ultra-wealthy to start building wealth in the stock market. With just $1,000, investors can buy into promising growth stories and put their money to work in businesses shaping the future. The key is choosing companies with strong tailwinds, clear expansion potential, and the ability to multiply in value over time. Even a modest sum split between the right names can grow meaningfully over the years.

Two stocks that stand out right now are American Resources (NASDAQ: AREC) and Freshworks (NASDAQ: FRSH). By allocating roughly $500 to each, investors gain exposure to two very different but compelling growth opportunities: one in the critical minerals powering the clean-energy transition, and the other in software that helps businesses connect with customers more effectively.

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.

The critical minerals moonshot

American Resources exemplifies how quickly narratives can transform stock prices. The company spent years as a struggling coal producer before pivoting toward rare earth elements and critical minerals essential for clean energy infrastructure. That strategic shift coincided perfectly with Washington's push to reduce dependence on Chinese mineral supply chains. The stock has responded accordingly, surging 173% in 2025 as investors price in a future where American Resources supplies the lithium, graphite, and rare earths needed for the energy transition.

The opportunity is massive. The U.S. imports nearly 100% of its rare earth elements despite their critical importance in electric vehicles, wind turbines, and defense applications. Government support for domestic production has never been stronger, with billions in federal funding flowing toward securing supply chains. American Resources is in a position to capture this spending through both its existing operations and development projects. The company's ReElement Technologies subsidiary focuses on battery material recycling and purification, adding another revenue stream tied to the circular economy.

But small-cap stocks with market values under $500 million carry outsized risks. American Resources remains pre-revenue on many initiatives, burning cash while building out capabilities. Commodity prices swing wildly -- what looks like a secular growth story today could become a cyclical disaster tomorrow if rare earth prices collapse. Ultimately, this is a high-risk bet on management execution and Washington's support for critical minerals -- not a play on today's numbers.

The software discount special

Freshworks tells the opposite story -- a profitable growth software company punished for sins it's already addressing. The customer engagement platform posted over $200 million in revenue last quarter, representing low-teens growth year over year. That's not hypergrowth, but it's steady expansion in a market where Salesforce and ServiceNow leave plenty of room for competitors targeting small and mid-sized businesses. Yet the stock has shed 23% of its value this year.

The numbers suggest Freshworks deserves better. Gross margins exceed 84%, typical for quality SaaS businesses. Operating losses are narrowing each quarter as the company balances growth investments with cost discipline. The product suite keeps expanding with AI-powered features for customer support, IT service management, and customer relationship management -- capabilities that smaller businesses need but can't afford from enterprise vendors. With over 68,000 customers globally, Freshworks has proven product-market fit.

The bearish case centers on competition and profitability timing. Salesforce and ServiceNow dominate enterprise accounts with deeper functionality and stronger ecosystems. Reaching profitability might take several more quarters, and the market has shown little patience for companies still burning cash. If the economy weakens, small business customers could churn faster than larger enterprises. But at just 18.5 times forward earnings, much of this pessimism appears priced in.

The $1,000 portfolio

Splitting $1,000 between American Resources and Freshworks creates an intriguing barbell strategy. American Resources offers lottery-ticket exposure to the critical minerals boom -- if the company executes and government support continues, the stock could multiply from here. Freshworks provides a more traditional growth story with improving fundamentals, trading at a discount to both the S&P 500 and its closest peers.

Should you invest $1,000 in American Resources right now?

Before you buy stock in American Resources, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Resources wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,593!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,089,215!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 188% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 22, 2025

George Budwell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce and ServiceNow. The Motley Fool has a disclosure policy.