Investors have been taken on quite the ride since this decade began. They've endured two bear markets (the COVID-19 crash and 2022 bear market), as well as a period of borderline irrational exuberance in 2021, at least for growth stocks.
Despite a meaningful rally in the benchmark S&P 500 and innovation-fueled Nasdaq Composite since the start of the year, both indexes remain well below their record-closing highs set nearly two years ago. While some might view this as disappointing, long-term investors with cash on hand are licking their chops. That's because every notable drop in the major stock indexes throughout history has, eventually, been pushed aside by a bull market.
Image source: Getty Images.
One of the best aspects of investing on Wall Street is that most online brokerages have ditched minimum deposit requirements and commission fees associated with trades on major U.S. exchanges. It means any amount of money -- even $300 -- can be the perfect amount to invest.
If you have $300 to put to work on Wall Street, and you're certain this cash won't be needed to cover emergencies or pay bills, the following three stocks stand out as no-brainer buys right now.
Baidu
The first company that makes for a surefire buy if you have $300 ready to invest right now is China-based Baidu (BIDU 0.62%).
Baidu looks to be contending with two key headwinds. To start with, China's economy is still finding its footing after three years of stringent COVID-19 mitigation measures. The supply chain disruptions caused by China's zero-COVID strategy have hampered Baidu's near-term growth.
The other cause for concern is the U.S. further clamping down on the export to China of high-powered artificial intelligence (AI)-driven graphics processing units from the likes of Nvidia. Baidu is one of a handful of China-based businesses leaning on AI as a source of future growth. If the company's access to high-compute processing is limited, Baidu's AI-driven growth prospects could sour a bit.
Although these are tangible concerns responsible for weighing on Baidu's stock over the past couple of quarters, the upside substantially outweighs any risk at this point.
Baidu's foundational operating segment, its internet search engine, remains dominant in China. According to data from GlobalStats, Baidu accounted for 67.5% of internet search share in China in September, which was nearly 54 percentage points higher than the next-closest competitor. It's the clear go-to among China's advertisers, which suggests it'll remain a dominant cash-flow driver for the company.
Aside from dominating the internet search space in China, Baidu has quickly become a force in AI. It operates the top autonomous ride-hailing service in the world (Apollo Go), and has generated consistent double-digit sales growth from its AI Cloud segment. Enterprise cloud spending is still in its early stages, which suggests Baidu's non-online marketing revenue will continue to outpace growth from its online marketing segment.
Best of all, margins from non-online marketing should be juicier than online marketing revenue. As these ancillary operations grow into a larger piece of the pie for Baidu, cash-flow growth should outrun overall sales growth.
A forward price-to-earnings (P/E) ratio of 10 is a dirt cheap valuation for a brand-name company with a history of double-digit growth.
Paramount Global
A second no-brainer stock to buy with $300 right now is media giant Paramount Global (PARA -2.22%).
There are a few well-defined reasons Paramount Global stock has been clobbered since ascending to the heavens in early 2021. The first is the growing likelihood of economic uncertainty. Legacy media companies still rely on advertising for a meaningful portion of their revenue generation. Any time the slightest hint of economic turbulence arises, advertisers quickly pare back their spending.
Paramount's streaming segment is also bleeding red. Legacy media companies have been compelled to promote streaming as cable cord-cutting has picked up. However, the losses from these segments are weighing on most legacy companies, including Paramount Global.
The other issue for Paramount is its debt-heavy balance sheet. With interest rates rising at their fastest pace in four decades, future refinancings and debt-financed deals will almost certainly be costlier.
But in similar fashion to Baidu, the worst for Paramount appears to be baked in at this point.
There shouldn't be any real concern about the company's advertising revenue, which has two tailwinds in its sails. Next year is an election year, which typically bodes well for advertisers. Further, the U.S. economy spends a disproportionate amount of time expanding, relative to contracting. Ad-driven businesses will, therefore, spend far more time benefiting from a rise in ad spending than playing defense.
Despite pronounced operating losses, Paramount Global has made meaningful strides with its direct-to-consumer segment. Paramount+ grew to roughly 61 million subscribers by the end of June, while Pluto TV hit approximately 80 million monthly active users during the March-ended quarter.
Paramount's original shows and unique content gives the company ample ability to raise its monthly subscription price for Paramount+. Meanwhile, Pluto TV is the nation's leading free, ad-supported streaming platform. If the U.S. economy were to dip into a recession, it would likely be the top choice for value-oriented streaming users. The point here being that Paramount's streaming assets are well positioned for success.
The valuation also makes sense. The company's forward P/E of 10, as well as its proven ability to generate north of $2 in earnings per share when the U.S. economy is expanding at a healthy pace, makes Paramount an intriguing value.
Image source: Getty Images.
Airbnb
The third no-brainer stock to buy with $300 right now is stay-and-hosting platform Airbnb (ABNB 0.75%).
Arguably the biggest grey cloud for Airbnb is the uncertainty hovering over the housing industry. Mortgage rates have soared to a more than two-decade high, and a number of economic data points and predictive tools suggest trouble may be brewing for the housing industry. If the U.S. were to dip into a recession, the expectation would be for travel budgets to shrink, which wouldn't be good news for Airbnb.
While there was a time during the COVID-19 pandemic when the company's valuation was concerningly high, that's no longer the case. With shares well off their 2021 high, Airbnb has the tools and intangibles necessary to make patient shareholders notably richer.
It all starts with Airbnb's hosting marketplace. The company boasts more than 4 million hosts worldwide, but this figure represents just a fraction of an estimated 1 billion worldwide homes. If the housing market were to remain challenging, homeowners may turn to Airbnb's platform to generate additional income. This would represent one way of greatly increasing listings.
Growth on the platform has been nothing short of impressive. Aggregate bookings, which includes nights and experiences -- i.e., adventures led by a local expert -- have more than tripled from 140 million in 2018 to an annual run rate of more than 460 million, as of the end of June 2023. There simply isn't a disruptive short-term lodging offering the scale or options that Airbnb brings to the table, and the company's bookings growth demonstrates this.
A structural change in the labor market is working in Airbnb's favor, too. More people than ever are working remotely following the worst of the pandemic. With remote workers no longer tethered to a specific location, long-term stays of 28 or more nights have been Airbnb's fastest-growing segment.
But the most exciting aspect of Airbnb's growth might be its potential in experiences. Travel is a more than $8 trillion industry, and Airbnb has an opportunity to partner with a host of other companies in the transportation, dining, and "adventure" space to get its hands on a larger piece of the pie.
Airbnb's forward P/E of 27 looks like a steal for an industry disruptor that shouldn't have any trouble sustaining a double-digit growth rate.
