The Smartest Growth Stocks to Buy With $500 Right Now

Key Points

• Super Micro Computer's competitive advantages, combined with strong demand for its cooling systems, gives it strong AI tailwinds.

• Duolingo is adding more paid subscribers and could benefit from a growing edtech market.

• These 10 stocks could mint the next wave of millionaires ›

If you've got $500 and a long-term mindset, you don't need to chase the riskiest penny stock or the next meme rocket. A smart growth stock -- one with real revenue, real users, and a clear path to profitability -- can do a lot of heavy lifting on its own. Especially in this market, where interest rates may have peaked, AI is reshaping entire industries, and consumers are flocking to platforms that feel both human and fun.

So where should that $500 go? Here are two stocks that combine strong business fundamentals with a credible story for the next decade.

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Super Micro Computer

Not everyone wants to guess which AI model will win. Super Micro Computer (NASDAQ: SMCI) makes that decision easier by selling the servers that power all of them.

Over the years, Supermicro carved out a lead in the AI server race by moving faster than rivals like Dell Technologies and Hewlett Packard Enterprise, thanks in large part to its close ties with Nvidia and Advanced Micro Devices. Those close relationships gave it access to chips earlier than competitors -- Supermicro's California headquarters are, as Reuters pointed out, only 10 miles from Nvidia and AMD -- helping it prototype and ship customized servers in a matter of weeks. That competitive advantage, together with the strong demand for its liquid cooling systems, made it a go-to supplier for AI infrastructure.

For the trailing 12 months, Supermicro posted $21.57 billion in revenue, nearly triple its total from two years ago. And although fiscal third-quarter 2025 net sales dropped to $4.6 billion (down from $5.68 billion in the second quarter), the company expects net sales of $5.6 billion to $6.4 billion in Q4, a strong rebound likely tied to delayed customer orders.

Growth like this won't come easy, nor cheap for that matter. Indeed, Q3 operating expenses surged to $293.4 million, up 34% from $219.1 million in the year-ago period, while gross margins dropped to 9.6% from 15.5% in Q3 2024. And with competitors like Dell expanding into its space, those margins could get harder to improve.

Still, Supermicro has leverage. Its modular rack systems offer a plug-and-play approach at a time when enterprises need to move fast but build smart. As more second-tier AI players like hospitals and financial institutions look to stand up their own models, they'll need hardware that doesn't require months of integration. Supermicro's flexibility here could open up a secondary growth channel that's less dependent on hyperscalers and more tied to the next wave of AI adoption.

Duolingo

Duolingo (NASDAQ: DUOL) is still the world's most popular education app.

It's also still growing. In the first quarter of 2025, the company reported a 38% year-over-year revenue jump to $230.7 million, its highest quarterly haul yet. Monthly active users (MAU) climbed to over 130 million, a 33% year-over-year increase, and the number of paid subscribers rose 40% year over year to a record 10.3 million. A growing slice of that base, about 7%, now pays for the premium Max subscription, which offers AI-driven tutoring and more personalized feedback. Since Max carries a higher price point, its adoption signals a willingness among users to pay more for deeper value, something that could lift Duolingo's long-term margins.

But even for a company with these credentials, the stock struggled lately. Shares dropped about 33% from their May highs, as Duolingo's daily active users (DAU) rate slipped from 56% in February to 37% by June, according to a Jefferies analyst. The stock is also trading at over 175 times earnings, which is several multiples higher than the S&P 500 index's price-to-earnings ratio of 30. A valuation like that leaves little room for error, especially when engagement metrics are trending the wrong way.

Still, that premium might be easier to swallow when you zoom out and consider just how fast the education technology market is expanding. By 2030, edtech is expected to hit $348 billion, up from $164 billion in 2024, or a compound annual growth rate (CAGR) of 13.3 %. Meanwhile, the language learning market -- Duolingo's primary stomping ground -- is forecast to hit $125 billion by 2034 (up from $11.2 billion in 2024), or a CAGR of 26.7 %.

Given that Duolingo is already the industry's leading paid language-learning app, it's not hard to imagine a scenario in which it grows into its valuation, especially if it keeps converting users into paid subscribers.

Bet on fundamentals, not hype

Both Duolingo and Supermicro are playing long games in markets that are only getting bigger. Duolingo is turning language learning into revenue, while Supermicro is selling the picks and shovels of the AI boom. If you're thinking long-term, investing $500 in one (or both) could buy you a meaningful slice of the future.

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Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Jefferies Financial Group. The Motley Fool recommends Duolingo. The Motley Fool has a disclosure policy.