Jeremy Bowman, The Motley Fool
4 min read
In This Article:
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Meta has a wide moat in social media and digital advertising and a track record of steady growth.
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Axon has built a unique business in law enforcement technology.
If you have $50,000 to invest, you're in a good position. That's enough to make a significant difference for your retirement or whatever else you're investing for.
With $50,000 to invest, you'll likely want to find stocks that can deliver growth, but with relatively low risk. Luckily, there are a number of stocks available on the market that embody those characteristics. Keep reading to see two of them.
Meta Platforms (NASDAQ: META) may be the best example of a business that can burn through billions in cash on a side project, but is still overwhelmingly successful.
Meta has lost more than $60 billion on its metaverse and artificial intelligence (AI)-focused division, Reality Labs. But the success of its advertising business and the growth of its family of apps division has more than made up for it.
Over the last three years, the stock is up more than 300%. It's fended off a threat from TikTok with its Reels. Meta's AI tools are also helping the company better monetize its ad inventory and help its advertisers use AI for images and ad copy.
Meta effectively has a duopoly in digital advertising with Alphabet, but it's outgrowing its large rival. In the first quarter, revenue jumped 16% to $42.3 billion, and Meta reported an operating profit of $17.5 billion, or an operating margin of 41%.
The company benefits from a dream business model where it sells ads on user-generated content, and has more than 3 billion daily active users across its apps, primarily including Facebook and Instagram.
Meta's wide-moat advantage in digital advertising and social media isn't likely to go anywhere, and the business should continue to experience solid growth as long as the economy is healthy.
Meta is also a top AI competitor. Meta AI's chatbot now has nearly 1 billion users, giving it the biggest user base of any AI platform. The company's deal with Scale AI should also accelerate its AI ambitions.
Finally, the stock trades at a price-to-earnings ratio of 27, which looks like a great valuation for a company growing at its pace.
Overall, Meta combines solid growth, wide profit margins, a strong competitive advantage, and a good valuation, making it a great stock for a large investment. The company looks like a good bet to continue outperforming the market at relatively low risk.
