It is natural to want to generate returns on your investment and to expect every penny to grow. While it may seem too ambitious, it can become possible if you know the right investment opportunities. You need to identify the stocks that can generate significant gains in the coming years. While there is no certainty about the stock market, some stocks keep moving upwards, no matter the market situation. This is where the possibility of growing your money lies. If you are starting your investment journey with $5,000, here are the three stocks that can generate solid returns for you in the coming years. They are reliable, have a strong balance sheet and will not disappoint. Let’s take a look at the stocks to buy with $5,000.
Amazon (AMZN)
One of the best stocks of 2024, Amazon (NASDAQ:AMZN) is on a wild ride. It is an incredible business, and you will never regret owning the stock. The company has gone beyond the modest e-commerce business it started as. Today, it is a diversified business with a strong presence in the advertising, cloud computing and streaming industries.
One of its most valuable businesses is Amazon Web Services (AWS) which has steadily generated revenue for the company. This segment reported a revenue of $90.8 billion in 2023 and is growing at a rapid pace. It easily beat expectations in the fourth quarter, and the net income was $10.6 billion while the revenue was up 14% year-over-year (YOY) driven by the holiday sales.
If you look at the bigger picture, Amazon’s business has expanded across all the segments. It is set to benefit in 2024 from higher consumer spending and low inflation. The retailer is a mature company that enjoys steady revenue and cash flow.
Besides seeing growth in the e-commerce segment, the company is also seeing steady revenue expansion in advertising. The segment saw a 27% YOY jump in the fourth quarter and this could keep growing throughout the year and beyond.
Amazon’s operating income is soaring and reached $13 billion in the recent quarter. It has ample cash flow which allows the company to continue investing in the business. The company is expanding and making investments across different industries. It is aiming for the moon with the recent advances in the satellite internet market.
Trading at $178 per share, AMZN stock is up 18% year to date and is at its 52-week high. However, I feel the stock still has further upside potential. If you have $5,000 to invest, make the move.
Nvidia (NVDA)
One of the best stocks to buy with $5,000 is Nvidia (NASDAQ:NVDA). It has made investors rich over the past few months and if you missed the chance to buy the stock, you can buy it now. The tech giant is making the most of artificial intelligence (AI), and looking at the AI industry, Nvidia chips will remain in demand for the coming years.
Up 70% year to date, NVDA stock is exchanging hands for $822 and has soared 249% in the past year. There is no looking back for the tech giant, and I don’t think its rally is still over. I wrote about Nvidia last week and it was trading at $790. You’d already be sitting on gains if you had made the move then.
Nvidia has reported an exceptional performance in the fourth quarter with a record quarterly revenue of $22.1 billion, up 22% from the third quarter and up 260% YOY.
Its biggest revenue generator, the data center segment saw a 27% rise from the third quarter to hit $18.4 billion. Nvidia has managed to beat expectations quarter after quarter, displaying its financial strength and strong growth prospects. The company’s full-year revenue increased by 126% YOY to hit $61 billion and it saw a significant improvement in the gross margins.
Its recent partnership with Cisco (NASDAQ:CSCO) where Nvidia will deploy and manage the secure AI infrastructure could boost the stock. Nvidia will also offer cloud-based solutions to the company. Several analysts have upped their target after the strong quarterly results.
No tech company has come close to Nvidia’s success. As long as it can maintain dominance in the AI industry, it is going to keep winning. The stock isn’t cheap, but is worth every penny.
Microsoft (MSFT)
One of the best tech stocks, Microsoft (NASDAQ:MSFT) is a tech dinosaur that has steadily emerged as a winner in the competitive industry. It is also making the most of AI and is applying it across a wide range of products and services. The company has many growth drivers which have helped achieve strong financials in the recent quarter.
It saw an 18% YOY rise in revenue to hit $62 billion in the second quarter, and the cloud revenue was up 22% YOY to hit $27.1 billion. Investors need to remember that Microsoft does not enjoy fleeting success but it is a long-term winner in the tech industry. AI will have a positive impact on the business and it is poised to deliver higher growth in the coming years. Its cloud business is a huge success and has become an integral part of several businesses.
The stock is up 12% year to date and is exchanging hands for $415 today. The company is already making money from the impressive AI investments and has integrated AI in several functions in the Office365 suite, Bing and Microsoft 365 Copilot.
It will enjoy strong growth in the coming years driven by AI products. MSFT is also a dividend stock with a yield of 0.72% and is the one to own and hold forever. Analysts are highly optimistic about the future of the stock and are expecting it to head higher.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.