Over the past few months, the stock price has been mainly up, which has been a very good feeling. However, investment emotions can also trap investors and shorten their memories. It wasn’t that long ago that the mood on Wall Street was hopeless and gloomy.
It’s easy to forget how volatile Wall Street is. Markets generally don’t stay in one direction for long, and pivots can occur quickly. Many tech stocks have experienced sudden turmoil over the past week or so, which could signal that the first correction of this bull market is near.
Please accept it. Corrections are healthy, allowing investors to buy rising stocks on a pullback. Some major artificial intelligence (AI) stocks come to mind here.
Here are three stocks that investors can buy for less than $1,000 and hold with confidence for the long term. Nibble on it now, and consider buying more aggressively if the market continues to slump.
1. Palantir Technologies
Data and AI software company Palantir Technologies (PLTR -2.63%) is generating significant growth momentum for its commercial customers after building its business primarily for the U.S. government and its allies. Palantir builds custom software on its proprietary platform to help customers analyze data and trends to support real-time decision-making in end markets ranging from national security to healthcare. The bottom line is that data is becoming a competitive advantage, and Palantir is helping customers take advantage of it.
Palantir’s growth story is still in a significantly early stage. The company ended his 2023 with just 375 commercial accounts. There are 350,000 large companies around the world. Palantir’s top 20 customers currently spend an average of more than $55 million per year each, so the software may not fit into every company’s budget. But it seems reasonable that Palantir could build a customer base of several thousand over the next decade or more.
The best part is that Palantir has become a highly profitable company. The company has been consistently profitable according to Generally Accepted Accounting Principles (GAAP), and analysts believe profits could grow 26% annually over the next three to five years. Even considering the expected growth rate, the P/E ratio is 69 times, which is not cheap at all. Investors should be happy about the market rebound that makes Palantir available at a lower price.
2.Microsoft
technology conglomerate microsoft (MSFT -0.32%) has entered the AI battle, relying on cloud platform Azure and a strong partnership with OpenAI, creators of ChatGPT and Sora. Microsoft is incorporating AI technology into its business, including Microsoft 365 software, Bing search, and enterprise software apps. As the world’s second largest cloud platform, Azure is also used by other companies for AI.
The great thing about Microsoft is that it’s such a robust and balanced company that investors can profit from AI while ultimately owning the stock forever. Microsoft generates nearly $70 billion in free cash flow annually and has a fortress balance sheet with a credit rating of AAA, higher than the U.S. government. In other words, Microsoft may be the least likely company in the world to go bankrupt.
The combination of AI excitement and Microsoft’s strong reputation means the company trades at a very high price-to-earnings ratio of 34 times, and analysts expect earnings to continue to grow by an average of 16% annually. If a market downturn causes stocks to fall from all-time highs, investors should keep Microsoft near the top of their buy list.
3. CrowdStrike Holdings
Cybersecurity is a long-term, tremendous growth trend. An increasingly digital economy demands better security technology to protect against sophisticated attacks and hackers. crowdstrike holdings (CRWD 0.19%) is one of a new cohort of next-generation security platforms that use cloud technology and AI to deliver real-time protection that adapts and improves on the fly.
CrowdStrike sells a variety of products and services in modules, and cross-selling to customers supports significant revenue growth. As of CrowdStrike’s fiscal third quarter of 2024, approximately 63% of customers have paid for at least 5 of his modules, and 26% have paid for 7 or more of his modules. I am. The business is highly profitable, converting 30% of its revenue into cash flow, and also has $2.4 billion in net cash.
The stock price has been in free fall, rising 170% in the past year. CrowdStrike currently trades at a P/E ratio of 80x, which is very high even though annual earnings growth is expected to average 36%. Again, investors shouldn’t try to time their initial purchase perfectly, but they shouldn’t jump in all at once for fear of missing the boat. Build your position slowly and buy when the market starts to throw cold water on a stock’s hot momentum.
Justin Pope has no position in any stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike, Microsoft, and Palantir Technologies. The Motley Fool recommends the following options: His January 2026 $395 long call on Microsoft and his January 2026 $405 short call on Microsoft. The Motley Fool has a disclosure policy.
