Owning stocks is fun again! After 2022, some people might have questioned whether the stock market was a good way to grow wealth -- or shrink it.
However, enthusiasm has returned with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average up 6%, 13%, and 2%, year to date, respectively.
So what stocks should investors buy if they have some extra cash? Here are my three picks for those with $700.
Image source: Getty Images.
Airbnb
The first stock I would buy with $700 right now is Airbnb (ABNB 1.03%).
The company operates one of the world's best-known travel booking platforms, connecting travelers with hosts in more than 220 countries. With over 4 million hosts, Airbnb can offer travelers an almost limitless array of locations and homes.
What's more, the company is finally hitting its stride financially after the COVID-19 pandemic posed a severe threat to its business model. Key metrics are on the rise.
Consider these highlights from Airbnb's dazzling fourth-quarter earnings results released just days ago:
- Nights and experiences booked grew 20% year over year to 88.2 million.
- Gross booking value also rose 20% to 13.5 billion.
- Cross-border travel jumped 49% from the year-ago period.
In addition, the company continues to see robust demand for long-term stays. Airbnb noted that 21% of total gross nights booked are for stays lasting longer than 28 days.
With its large base of host properties, Airbnb is set to capitalize on the world's insatiable desire to travel -- and that's why it's my first pick.
Tesla
The second stock worth buying right now is the hottest automaker on the planet: Tesla (TSLA -3.40%).
Tesla CEO Elon Musk's biggest ambition might be getting humanity to Mars, but perhaps his second is replacing the internal combustion engine. And on that front, Musk is making exceptional progress.
Of course, Musk isn't the first visionary to attempt to replace gas guzzlers with electric vehicles (EV). Many have tried over the years, but Tesla seems like the first company with a genuine shot at success. However, three main obstacles have always stood in the way of EVs in the past: production, demand, and cost.
Yet Tesla has overcome these challenges through innovation (and, to be fair, a healthy dose of government subsidies in the case of cost).
The company surpassed 1.3 million vehicles produced in 2022 and now boasts factories in Shanghai, Germany, Texas, and California. Moreover, the first deliveries of its Cybertruck pickup are expected by the end of 2023. The exact number of Cybertruck pre-orders is unknown, but analysts estimate it is over 1.5 million.
That's great news for the company, as it demonstrates that even as more and more Teslas hit the road, there's still unmet demand for its new models. That's one more reason Tesla is a name worth owning now and for years to come.
Nvidia
My third and final pick is Nvidia (NVDA 4.35%). The maker of graphics and mobile processors is one of the world's leading semiconductor businesses and has branched out from its gaming roots.
The company serves four key markets: gaming, data center, professional visualization, and automotive.
As the rise of ChatGPT has shown, the public is eager to embrace artificial intelligence along with the productivity, innovation, and entertainment it aims to provide. However, cutting-edge AI requires massive computing power, which can only come from advanced semiconductors -- like the ones produced by Nvidia.
Granted, there are risks for the company. The first is that its gaming segment delivers 46% of its revenue -- and the gaming market is currently in the dumps. However, in the long term, gaming cyclicality is a small part of the story. The much larger one is the rise of AI, and how Nvidia stands to benefit from it.
We're still in the early innings when it comes to AI. And as developers create new and exciting tools, the hardware behind the cool gadgets and apps will have to keep up. With its proven ability to innovate and deliver, Nvidia is a name worth owning as the AI revolution continues to gain steam.
