Artificial intelligence (AI) isn't just a fad. The technology is changing entire industries, and from the looks of it, we could still be in the early innings of this story. Some of the leaders in AI could deliver outstanding returns over the long run for those who initiate positions today.
That's why some of the best stocks to buy on the market are arguably companies that have a hand in this industry. Two of them stand out as among the best investments to make with $1,000 right now: Nvidia (NVDA 0.68%) and Microsoft (MSFT 1.01%).
Image source: Getty Images.
Nvidia
No company has ridden the AI tailwind in recent years better than Nvidia. The company's revenue and earnings have grown significantly in recent years, driven by strong demand for its GPUs (graphics processing units), which have become the industry leaders for providing the processing power needed to train large AI models. The fact that no one has been able to unseat Nvidia so far is also not an accident. The company benefits from a strong economic moat related to switching costs, thanks to its CUDA platform (a programming language that helps developers write code that runs on Nvidia's GPU).
NASDAQ: NVDA
Key Data Points
So, thanks to its market-leading hardware and associated programming services, Nvidia is better positioned than arguably any other company in the AI industry right now. And even though it is currently the world's largest company by market cap -- and even after several years of incredible performances -- there is plenty of upside left for Nvidia as it continues to ride the AI wave. Shares are trading at just under $185 apiece, so $1,000 is good for five of them.
2. Microsoft
Microsoft played a significant role in the current AI boom, which arguably began with the release of OpenAI's ChatGPT, a company with which Microsoft has a close relationship. The tech leader now offers a suite of AI services -- including ChatGPT's market-leading large language models -- through its cloud division, whose contracted backlog continues to grow rapidly, partly thanks to its AI business. As of the end of Microsoft's first quarter of its fiscal year 2026, which closed on Sept. 30, Microsoft's backlog was $392 billion, growing 51% year over year.
NASDAQ: MSFT
Key Data Points
Microsoft's cloud business also benefits from a moat thanks to switching costs. Of course, the tech giant is much more than its cloud segment. It remains the leader in computer operating systems, for instance. However, Microsoft Azure should remain its biggest growth driver for a while, and with rising demand for AI and cloud services, the company could continue to perform well and deliver above-average returns, just as it has in the past. Microsoft's shares are currently trading for approximately $479 each. With $1,000, investors can buy two of them.
