Top Investment Options with a $1,000 Budget Currently Available
Top Investment Options with a $1,000 Budget Currently Available
Soaring in 2024, the stock market heads towards the end of December in a turbulent manner. On December 20th, Friday, stock of AI chip designer Nvidia dips by 11% in a month.
Despite this, the stock is still up by a significant 161% year-to-date. This major correction might just be the chance you've been looking for to snatch up Nvidia shares at a discounted price.
However, despite being a market favorite, Nvidia isn't my top pick right now. The shares remain expensive, with a trailing earnings multiple of 52 and a free cash flow multiple of 58. There are plenty of moderately priced alternatives available.
If you have a grand left over post-holiday spending, here are two of my preferred investment options at the moment. Fiverr International's (FVRR -1.68%) growth potential is significantly undervalued, and Intel's (INTC -0.69%) underdog status has piqued my interest.
Fiverr's growth journey is far from finished
Many believed Fiverr to be a direct play on the COVID-19 pandemic. With folks cooped up at home and fluctuating income sources, why not utilize a freelance services provider like Fiverr to alleviate financial strain for a bit?
On the flip side, those who propelled Fiverr's stock to lofty heights in 2020 and 2021 have since stayed away. With the lockdowns over, the temporary and unique business opportunity, they argue, is a thing of the past.
Not quite. Even after the widespread return to offices, Fiverr's business has continued to expand, albeit at a slower pace. The company has proven to be quite profitable, even in the shareholder-friendly realm of free cash flows.
And yet, Fiverr's shares have lagged behind the broader market during this bull run. Over the past two years, Fiverr's shares have risen by a mere 9%, while the S&P 500 (SNPINDEX: ^GSPC) rose by 55% over the same period. The stock trades at an incredibly affordable 14.6 times free cash flows, and its forward-looking price-to-earnings ratio is also low.
The company anticipates solid revenue growth in 2025, driven by improved confidence among small and medium-sized business owners. In the third-quarter report of October, Fiverr's shares soared 35% after surpassing analyst targets. While this buoyant correction was a good beginning, Fiverr's market makers have more work cut out for them.
Considering everything, Fiverr's stock seems undervalued. This growth narrative appears significantly undervalued, and I foresee positive developments in the near future.
Intel's strategy change merits more recognition
Semiconductor giant Intel is trying out a completely different business strategy. I mean, Intel is pulling out all the stops to implement these drastic strategy changes. Before the COVID-19 crisis, Intel's capital expenditures hovered around $15 billion annually. Building one of the world's largest third-party chip manufacturing services isn't cheap, and those costs skyrocketed to approximately $25 billion in the past three years.
Intel aims to become the world's second-largest external chip foundry by 2030. This ambitious goal could significantly boost Intel's business results and shareholder value, while also addressing an important market need. Most of Intel's chipmaking facilities are being developed in places like Arizona and Ohio, making advanced semiconductor manufacturing available domestically.
This is crucial for national security reasons. Due to long-standing trade restrictions and tariffs between the U.S. and Asian chip factories, this approach sets Intel up for long-term success.
Intel is currently operating at a loss and trades at rock-bottom valuation multiples during this challenging period. Intel's former technology visionary, Pat Gelsinger, was pressed to retire as impatient large shareholders grew disenchanted with his relentless focus on long-term gains. In my opinion, this disparity between Gelsinger's impressive legacy and an overly pessimistic market reaction creates a wonderful buying opportunity for Intel stock today.
Although the stock market is facing turbulence towards the end of 2024, this could be an opportunity to invest in discounted shares of Nvidia. Despite its expensive pricing, Fiverr International's growth potential and Intel's strategic changes and domestic manufacturing efforts make them promising investment options with undervalued stocks.