It's not easy to scrape together enough money to invest in the stock market. Inflation is making it harder to pay your monthly bills and everyday living expenses. Ridding yourself of high-interest debt and building up your emergency savings can also be quite a challenge.
But if you do have some available cash (say $1,000) and you're searching for some high-quality stocks to buy, read on. The following three companies have relatively easy-to-understand business models and their stocks are priced well under the $1,000 threshold. They're also set to benefit from undeniable trends while delivering handsome returns to their investors along the way.
1. Nvidia
Artificial intelligence (AI) is already changing how we learn, work, and play. More and more businesses of all sizes are rushing to deploy the game-changing technology. Demand for chips and software that enable AI is exploding -- so much so that the global AI market is expected to exceed $1.8 trillion by the end of the decade, according to data compiled by Statista.
Image source: Statista.
Nvidia (NVDA 6.18%) dominates the booming market for AI accelerators, the cutting-edge semiconductors that power AI applications. Companies like Microsoft and Alphabet are buying enormous amounts of Nvidia's chips to use in their rapidly expanding cloud computing operations. The chipmaker's sales and profits, in turn, are skyrocketing.
Nvidia doubled its revenue to $13.5 billion in the quarter ended July 30. Better still, its adjusted net income rose more than fivefold to $6.7 billion. Management sees even more gains ahead. Nvidia expects its year-over-year revenue growth to accelerate to a stunning 170% in the current quarter.
Roughly $1 trillion of data center-related spending is projected to shift toward buying infrastructure that is capable of supporting AI workloads. If Nvidia can capture even a portion of that spending, it has a long runway for further growth.
2. Visa
The shift from cash transactions to digital payments is another lucrative megatrend. Visa (V -0.23%), as the largest credit and debit card network operator, is situated to profit handsomely from this financial evolution.
With 4.2 billion credit and debit cards in use across 200 countries and territories, Visa's scale is unmatched. The payments titan processed a staggering 270 billion transactions amounting to $14.5 trillion during the year ended June 30.
Visa captures a small fee from every transaction that passes through its network. Collectively, these fees and Visa's ancillary revenue streams resulted in over $4 billion in profits in just its most recent quarter.
Not one to rest on its laurels, Visa is investing to cement its place atop the steadily expanding payments industry. The company plans to allocate $100 million toward generative AI ventures to spur innovation in e-commerce and payments technology. This forward-thinking initiative aligns well with CEO Ryan McInerney's goal of ensuring Visa remains "at the center of money movement for years to come."
3. Tesla
Like Nvidia and Visa, Tesla (TSLA -1.11%) stands to profit from powerful growth trends. The electric vehicle (EV) market is growing quickly, and Tesla is the clear industry leader.
Tesla's profitability is the envy of the auto industry. The EV maker's impressive operating margins are allowing it to cut prices to win more market share at a time when several of its competitors are dealing with worker strikes and soaring labor costs. CEO Elon Musk wants to build 20 million EVs per year by 2030, up from a projected 1.8 million vehicles in 2023.
Yet, Tesla is far more than just a car manufacturer. Musk views software and AI as major growth opportunities.
Tesla is collecting immense amounts of data from its vehicles to train its autonomous driving technology. Musk envisions this tech powering a fleet of self-driving taxis. He believes the demand for Tesla's robotaxis could be "quasi-infinite." For investors who prefer a more precise figure, Cathie Wood's Ark Investment Management estimates that the market for autonomous ride-hail products and services could reach $11 trillion by the end of the decade.
Musk also wants Tesla to be a major player in the automation market. The company is developing a humanoid robot named Optimus. Musk says it will be designed to handle "dangerous, repetitive, and boring tasks" in factories. Musk also hopes to use the technology to help amputees regain mobility and functionality. "I think it would be incredible to potentially help millions of people around the world and give them a robot arm that is as good, and maybe long term, better than a biological one," Musk said during Tesla's second-quarter earnings call in July. Thanks to these tremendous potential benefits, Musk believes Optimus could eventually become even more valuable than Tesla's EV business.
This unrivaled combination of best-in-class EVs, promising autonomous driving software, and AI-powered robotics makes Tesla an intriguing long-term investment.
