The Best Stocks to Buy With $500 Right Now

Inflation has been a beast over the last few years, and $500 no longer carries the same weight as it did at the start of the decade. Unfortunately, prices continue to rise and people should consider investing some of their savings in the stock market to maintain long-term purchasing power.

Below, I'll explore some reasons why Amazon (NASDAQ: AMZN) and Micron Technology (NASDAQ: MU) could be good buys.

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Amazon

Amazon shares are trading at a current price of $234, so you can buy around two shares of the company's stock -- unless you have access to fractional stock trading. However, quality usually matters more than quantity in the stock market. Amazon continues to dominate the e-commerce and cloud computing industries. In addition, its technology-led cost-cutting strategy promises to boost profitability.

Some investors may look at Amazon's $2.5 trillion market cap and assume it's done growing -- but that isn't true. The company still has a huge opportunity to expand its international e-commerce operations.

With $40.9 billion in third-quarter sales, the global business is less than half the size of its North American operation. More importantly, management can use new technologies, like robotics, to boost operational efficiency and drive profit growth, even when overall sales begin to plateau.

This year, the company deployed its 1 millionth worker robot, designed to assist warehouse employees with packing and sorting products. While robots often have high upfront costs, over time, they can pay for themselves through increased productivity. Amazon is also using generative artificial intelligence (AI) models to cut robot travel times and help them coordinate with each other and human operators.

Amazon is unique because it's an early leader in implementing AI into its own operations and helping sell it to other companies through its cloud computing division, Amazon Web Services (AWS). The company also boasts a 15% to 19% stake in Antropic, a dominant large language model (LLM) developer that's contractually obligated to use AWS for its model training and infrastructure needs.

Micron Technology

Generative AI remains the biggest story in tech, and investors are finally starting to appreciate the role Micron Technology could potentially play in this long-term opportunity. The computer-memory specialist's shares have already risen 193% year to date, and the rally looks set to continue because of the company's strong fundamentals and rock-bottom valuation.

When you think of generative AI hardware, you probably envision graphics processing units (GPUs) created by companies like Nvidia. However, these are just one of the ingredients that make this technology possible. Computer memory chips are also crucial because they store vast amounts of data needed to train LLMs, while also providing the short-term working memory the algorithms use to "think" and answer users' queries.

While Micron has been a high-performance memory hardware company for decades, investors have historically overlooked it because of slow growth and cyclical demand. Generative AI could help even out these fluctuations while boosting growth and margins.

Fiscal 2025 revenue increased by almost 50% because of strong data center demand related to AI. There also are compelling signs that the boom will continue.

According to experts at Semiconductor Manufacturing International Corp, rising generative AI-related demand has caused a shortage of memory chips that could worsen in 2026. Micron's South Korean competitor, Samsung Electronics, has responded to the shortage by hiking prices by up to 60% on many of its memory products. Micron could follow suit with margin-enhancing price hikes of its own in the coming years.

With a forward price-to-earnings multiple (P/E) of just 15.5, the stock looks downright cheap, compared to this long-term opportunity. For comparison, the Nasdaq100 index has an average estimate of 26, while AI hardware leader Nvidia trades for 28 times its projected earnings.

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.