It might seem like an awkward time for novice investors to buy new stocks. The S&P 500 is hovering near its all-time high and looks expensive at 31 times earnings, and plenty of macro headwinds -- including sticky inflation, elevated Treasury yields, and the Trump Administration's unpredictable policy shifts -- could compress those frothy valuations.
But if you can look beyond those near-term challenges, it's still a good idea to accumulate some reasonably valued stocks that have easy-to-understand business models, stable growth rates, and wide moats. I believe these three beginner-friendly stocks fit that description -- Oracle (ORCL +4.96%), TSMC (TSM +0.96%), and Palo Alto Networks (PANW +2.00%) -- and they could still churn small bets into big fortunes over the next few decades.
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1. Oracle
Oracle was once considered an aging tech company that had run out of room to grow. It was the world's largest database software provider, but it faced stiff competition from nimbler cloud-based competitors. However, over the past decade, the company transformed its on-premise software into cloud-based services, expanded its own cloud infrastructure platform, and acquired more companies to expand into the enterprise resource planning (ERP) and healthcare IT markets.
NYSE: ORCL
Key Data Points
That transformation initially compressed Oracle's margins, but it's now growing rapidly again as more companies ramp up their spending on its cloud infrastructure services to support their latest AI (artificial intelligence) applications. It predicts its Oracle Cloud Infrastructure (OCI) revenue will surge 77% to $18 billion in fiscal 2026 (which ends in May 2026) and account for 27% of its projected revenue for the year -- then soar to $32 billion in fiscal 2027, $73 billion in fiscal 2028, $114 billion in fiscal 2029, and $144 billion in fiscal 2030.
From fiscal 2025 to fiscal 2028, analysts expect Oracle's revenue and adjusted earnings per share (EPS) to grow at a CAGR of 30% and 22%, respectively, as that booming business becomes its core growth engine. Oracle's stock still looks reasonably valued at 24 times next year's earnings, and I believe it remains one of the safest and most straightforward ways to profit from the secular expansion of the cloud and AI markets.
2. TSMC
TSMC is the world's largest and most advanced contract manufacturer for silicon chips. Many of the world's top fabless chipmakers -- including Nvidia, AMD, Qualcomm, and Apple -- rely on TSMC to produce their smallest, densest, and most power-efficient chips. That makes it a linchpin of the semiconductor market and one of the most important tech companies in the world.
NYSE: TSM
Key Data Points
TSMC established that lead by investing in ASML's top-tier extreme ultraviolet (EUV) lithography systems -- which optically etch circuit patterns onto the densest silicon wafers -- before its closest competitors.
In its latest quarter, it generated 60% of its revenue from its smallest 3nm and 5nm nodes. In terms of platforms, it generated 57% of its revenue from the high-performance computing (HPC) market (which includes AI chipmakers like Nvidia), 30% from smartphone makers, and the rest from other markets.
TSMC expects its revenue to grow by a mid-30s percentage this year as it profits from the "AI megatrend" that is generating robust tailwinds for Nvidia and other HPC chipmakers. From 2024 to 2027, analysts expect its revenue and EPS to grow at a CAGR of 24% and 27%, as the AI market continues to expand. Those are stellar growth rates for a stock that trades at 18 times next year's earnings -- so it could head even higher over the next few years.
3. Palo Alto Networks
Palo Alto Networks, which serves more than 80,000 enterprise customers worldwide, is one of the world's largest cybersecurity companies. It splits its ecosystem into three main platforms: Strata, for its on-premise network security tools; Prisma, for its cloud-based security services; and Cortex, which handles its AI-powered threat detection tools.
NASDAQ: PANW
Key Data Points
Most of its recent growth was driven by Prisma and Cortex, which it collectively calls its next-gen security (NGS) services. In fiscal 2025 (which ended this past July), its NGS annual recurring revenue (ARR) increased 32% and accounted for 61% of its top line. That thriving business should continue to expand as more companies upgrade their aging on-premise cybersecurity systems with more scalable cloud-based features and more sophisticated AI tools.
From fiscal 2025 to fiscal 2028, analysts expect Palo Alto's revenue and adjusted EPS to both increase at a CAGR of 13%. Its stock might not seem cheap at 49 times this year's earnings, but its scale, diversification, and stable growth all justify that premium valuation. The broader cybersecurity market is also usually well-insulated from economic downturns, since most companies won't shut down their digital defenses just to save a few dollars, and Palo Alto is a solid bet on its long-term expansion.
