There's a lot you can do for $500: go shopping, get away to somewhere special, or simply pay some bills. But if you want that money to potentially grow into much more, look no further than the stock market. Let's explore why Nvidia (NVDA 4.76%) and Luckin Coffee (LKNC.Y 5.93%) could make excellent long-term choices. 

1. Nvidia 

Founded in 1993, Nvidia has since risen to become a leader in graphics processing units (GPUs), a type of computer chip crucial for 3D renderings and other demanding programs. The company's unassailable economic moat and potential in the burgeoning artificial intelligence (AI) industry help justify its premium price tag.

It's no secret that semiconductors and other advanced computer hardware are becoming an increasingly strategic commodity because of their usefulness and the complexity involved in designing and manufacturing them. While Nvidia's graphics processors are mainly used for video gaming and data centers, the emergence of ChatGPT and other advanced AI platforms could unlock an entirely new growth driver. 

According to industry research company Omedia, ChatGPT used 10,000 Nvidia chips to train its model. And Nvidia is working with 10,000 AI-related start-ups, which might also use its technology.

If AI can be likened to a gold rush, Nvidia would be the one selling the picks and shovels instead of doing the mining. This niche allows the company to enjoy the industry's growth while shielding itself from some of the challenges involved in building and marketing its own AI software.

With a forward price-to-earnings (P/E) multiple of 53, Nvidia's shares trade at a substantial premium to the Nasdaq average of 25. But this looks justified considering the company's long-term potential. 

2. Luckin Coffee

Up by a whopping 152% over the last year, Luckin Coffee is bouncing back from the impacts of its previous controversies. The Chinese coffee chain's spectacular growth, burgeoning profitability, and potential for international expansion could mean the rally is just getting started. 

In 2020, Luckin's board discovered that its former management had fabricated $300 million worth of sales in the previous year. The fallout led to several lawsuits and bankruptcy proceedings, which ended in April of 2022.

But while Luckin was busy restructuring its debt, it was also reworking its business strategy -- focusing on expanding its footprint and building out a franchising network of partnership stores. 

Dollar bill pinned to a dart board

Image source: Getty Images.

Fourth-quarter earnings highlight the company's epic transformation. Total revenue jumped 52% to $535.7 million, with partnership stores expanding by 88% to represent 23% of the total.

And some industry watchers predict Luckin Coffee could be eyeing an expansion to nearby Southeast Asian markets like Thailand and Singapore -- destinations popular with the Chinese diaspora and tourists, which might present a ready market for its products. 

With operating income of $45.4 million based on generally accepted accounting principles (GAAP), Luckin's business model looks sustainable and scalable, which is really important for accessing the value of its growth.

Which company is better for you?

While Luckin Coffee and Nvidia are both richly valued with excellent long-term growth potential, they fit different investing strategies.

Although Nvidia is a larger company with an unassailable moat, its future growth depends hugely on AI, which is still a somewhat speculative and immature technology. To me, Luckin Coffee looks like the safer bet because its business is simple and easily replicable -- both within its home market of China and other Asian countries.