There are some serious buying opportunities in the technology space these days. The rapid ascent of artificial intelligence (AI) means the world is changing faster than at any time in recent memory. With that, come fears over AI disruption, massive data center investments, and other concerns that have dragged on some world-class stocks.
Investors with some cash on hand can set themselves up for the future with some timely tech stock buys.
After sifting through dozens of names, Amazon (AMZN 1.61%), Salesforce (CRM +2.18%), and Taiwan Semiconductor Manufacturing (TSM 4.64%) jumped off the page as arguably the best stocks one can buy with $1,000 right now.
Image source: Getty Images.
1. Applaud Amazon for its AI investments
E-commerce and cloud giant Amazon has steadily tumbled from its high, and is currently working on a 20% drawdown. Wall Street gasped at Amazon's announced plans to spend $200 billion in 2026, primarily on AI and cloud capacity, aka data centers. Now, I'll admit, that's a massive chunk of money, even by big tech standards. That said, investors may eventually look back on Amazon and applaud it for leaning into the AI opportunity ahead.
Amazon plays a central role in AI as the world's leading cloud services company. Companies running AI applications primarily do so via the cloud. Therefore, AI is funneling cloud business to Amazon, and the company must realistically build the capacity to service that demand or risk ceding market share to competitors. Remember, AWS, Amazon's cloud business, is the golden goose. It accounts for most of Amazon's operating profits.
NASDAQ: AMZN
Key Data Points
And if AI is going to be a war won by colossal infrastructure, Amazon is arguably the best equipped for that fight, simply because of its experience building its e-commerce supply chain. Eventually, AI will present other opportunities to Amazon, such as humanoid robots that could transform its profit margins. The stock has slipped to just 15 times Amazon's operating cash flow, its lowest valuation in a decade.
2. Salesforce is weathering the (likely) overstated demise of software
Investors have become worried that AI will displace traditional enterprise software. The resulting sell-off has chopped Salesforce's stock in half. For those unaware, Salesforce is one of the longest-standing software companies. What started with software for managing customer relationships (CRM) has evolved into a massive platform, with integrations and software products that touch virtually every aspect of a company's daily activities. Sales, marketing, customer service, you name it.
Of course, AI may disrupt Salesforce; anything is possible, but it seems unlikely at best. Even if AI can build an interface that resembles Salesforce, ensuring it works, troubleshooting problems, and integrating with third-party apps are a whole other story. Salesforce is actually proactively integrating AI features into its products, giving customers access to AI tools without leaving the platform.
NYSE: CRM
Key Data Points
The pessimism has dropped Salesforce stock to less than 15 times forward earnings estimates, a jaw-droppingly low valuation for a leading software stock. Right now, analysts estimate that Salesforce will grow earnings by 18% annually over the next three to five years. It seems the stock easily compensates for any AI concerns at this point, making Salesforce a no-brainer rebound candidate.
3. Taiwan Semiconductor is looking at another banner year in 2026
Hundreds of billions of dollars are pouring into AI data centers, creating a golden growth opportunity for Taiwan Semiconductor (TSM). The company is the world's leading foundry, manufacturing chips for companies such as Nvidia and many others. It wouldn't be a stretch to call TSM the ultimate pick-and-shovel tech stock. It accounts for more than 70% of global foundry revenue, meaning the world's AI and tech flow primarily through TSM in some form or another.
TSM's importance hasn't gone unnoticed by investors; the stock is trading near its all-time high. It's just that Wall Street is struggling to keep up with TSM's rampant growth. Analysts estimate that TSM will grow its earnings by 30% annually over the next three to five years. That makes the stock a strong buy at just 25 times this year's earnings estimates.
NYSE: TSM
Key Data Points
AI currently has the full financial support of the private sector, and the U.S. government has emphasized AI's importance to national security. Research by McKinsey & Company estimates that total global data center spending will approach $6.7 trillion by the end of this decade. As long as that stays on track, it will be hard to find a bigger winner than Taiwan Semiconductor, as much of that capital winds up as chip orders that the foundry will ultimately help its customers fulfill.
