A $5,000 investment can go a long way, especially if you're loading up on fairly cheap stocks that may possess a lot of upside in the long run. By investing $5,000, you can ensure that if you pick a great stock, your profits could be significant.
Finding an excellent investment but generating only a modest profit can be bittersweet because you didn't invest a lot of money into it. But if you're investing $5,000, that gives you plenty of incentive to spend some time and choose your stocks carefully, while also potentially positioning yourself to earn significant gains if those stocks prove to be big winners in the years ahead.
Three potentially excellent growth stocks to buy and hold that are trading near their lows right now include Advanced Micro Devices (AMD -1.05%), Amgen (AMGN -1.14%), and Prologis (PLD 2.61%). Here's why these can be solid options to invest at least $5,000 into right now.
1. Advanced Micro Devices
Advanced Micro Devices, better known as just AMD, is a tech company that possesses a lot of growth opportunities due to artificial intelligence (AI). It hasn't been doing well over the past year, as rival Nvidia has been stealing the spotlight with its high-end chips and impressive growth numbers.
But that doesn't mean AMD is doomed. Its lower-priced products can provide companies with some valuable alternatives to Nvidia. And while AMD isn't generating the type of impressive growth Nvidia is, AMD can still be due for much better growth as it rolls out its Instinct MI325X chip. It's still in the early stages of producing the chip, and if it proves to be a hit with customers, it has the potential to give the company's sales and profits a boost.
AMD's net revenue grew at a rate of 18% in its most recent quarter (ended Sept. 28), as its top line rose to $6.8 billion. While that's a decent rate of growth, the company isn't doubling or tripling its top line the way other AI stocks have. Maybe AMD may not get to that level of growth, but that doesn't mean it can't be a top growth stock to own over the long haul.
The stock is trading around its 52-week low, and for investors willing to be patient, now may be an ideal time to load up on it.
2. Amgen
Pharmaceutical company Amgen is another example of a business that may not be getting the positive attention it deserves. Although the company has been investing in growth opportunities over the years, including its massive $27.8 billion acquisition of Horizon Therapeutics in 2023, investors have been largely bearish on the stock of late.
One underrated opportunity is in the GLP-1 drug market. Amgen has a promising treatment, MariTide, which has helped patients lose around 20% of their body weight. That puts it in the same ballpark as Eli Lilly and Novo Nordisk, which have weight loss treatments that have achieved similar success.
But MariTide is taken on a monthly basis, and in a recent trial, patients took it even less often than that. The injections from Eli Lilly and Novo Nordisk are taken weekly. If patients don't need to take MariTide as often and yet achieve similar weight loss, the drug could be in high demand, should it end up obtaining approval from regulators -- it may be available by 2027, according to analyst projections.
Investors haven't been bullish on the treatment, as recent trial data showed that it didn't achieve the 25% weight loss analysts were expecting, but it still has the potential to be a game changer for the business and the anti-obesity drug market.
I believe investors are overreacting to the recent news, and that could be creating a lucrative buying opportunity right now. At just 13 times its estimated future profits, Amgen may be the most attractively valued GLP-1 stock to buy right now.
3. Prologis
Wrapping up this list of undervalued stocks is Prologis, a logistics real estate investment trust (REIT) that could be a big winner as demand for e-commerce continues to grow. Businesses involved with logistics haven't been doing well of late due to economic concerns and a slowdown in spending as a result of inflation and higher costs of living.
But in the long run, economic conditions are likely to improve. And as that happens, the value of Prologis stock may increase significantly. Today, it's trading within a few dollars of its 52-week low. The REIT, however, is well positioned for growth, as it has a diverse mix of customers in many segments, ranging from consumer products to electronics to home goods to plastics, and many others.
Prologis' top 10 customers only account for 15% of its total portfolio. That diversification can give the business a lot of long-term stability while opening up many future growth opportunities.
Since 2020, the company has more than doubled its profits, and with a lot more room for the business to get bigger, Prologis could make for an underrated growth stock to buy and hold.
