The secret to successful investing is buying great companies and holding onto them for years. By giving your investments the time they need to grow you can create generational wealth. It’s the strategy used by all of Wall Street’s investing greats. The truly magical part of it is you don’t need a lot of money to start. Because most online brokerages have done away with “friction costs” like transaction fees, all of your money can start working for you right away. What follows are three of the best stocks to buy with $100 today. It’s not much, but it gets you in the game and can grow over time into a golden nest egg for retirement.
Best Stocks to Buy With $100: Arm Holdings (ARM)
Call it a tale of two semiconductor stocks. On the one hand, it was the worst of times with Intel (NASDAQ:INTC), which reported decent earnings but offered weak guidance. The results sent the chip stock reeling. On the other is Arm Holdings (NASDAQ:ARM), the U.K.-based chip designer that just reported its results and shot off to the moon. ARM stock rocketed 48% higher on the news.
Arm’s third-quarter earnings are its second as a publicly traded company. Both sales and adjusted earnings trounced management’s guidance let alone Wall Street estimates. Driven by its Armv9 architecture, the semiconductor stock saw royalty revenue soar and management expects it will be a major driver of future growth.
To understand why, it’s important to know that the platform was built with security and artificial intelligence (AI) in mind. Arm is part and parcel of almost every Android smartphone. It doesn’t make computer chips itself but rather licenses its designs to manufacturers who make systems-on-a-chip (SoC). It includes all the components needed for mobile devices, from the central processing unit (CPU) to all the other internal electronics. It’s designs are also in most PCs. The Armv9 is ARM stock’s next-gen architecture that was first released in 2021.
But Arm is seeing major market share gains in cloud servers and with auto manufacturers. The smartphone market is making a big comeback too. It now says next quarter’s earnings report will be another record and will exceed its prior full-year guidance. While I think waiting for the euphoria over this earnings report to subside a little is a good idea, Arm Holdings is a great stock to buy if you only have $100 to spend.
Roblox (RBLX)
The market may not have reacted the same to the earnings report from tween gaming platform Roblox (NASDAQ:RBLX) but its stock is also rising. The gamer enjoyed 22% growth in global daily active users (DAUs) including 17% growth in the U.S. and Canada, giving it 71.5 million DAUs. That’s important because North America is Roblox’s largest, most mature market yet business keeps expanding.
What is equally exciting is the acceleration Roblox sees in revenue per DAU. Overall it rose 3% but in Europe, Roblox saw a 14% gain. That could be because it is attracting an older audience now. While it has largely been a tweens platform it is gaining more in the over-13-year-old market. The older the demographic, the more they tend to spend. The 13+ demo grew 28% last quarter and now accounts for 58% of DAUs.
After bottoming out last September, RBLX stock gained 85% and is approaching its all-time high. Yet the stock is not overvalued. Average spend per user, the increase in player age, greater bookings and growing cash flows indicate Roblox is coming into its own. Prior valuations were built on hype. The current position is based upon solid expansion of the business. That should allow the online game platform to increase its multiple for investors who put $100 into its shares.
Snowflake (SNOW)
Cloud-based analytics firm Snowflake (NASDAQ:SNOW) hasn’t reported earnings yet but the stock is still up in 2024. Shares are 12% higher so far and are up 40% over the past year. The relevance of its collecting more data, housing it and providing greater tools to analyze to extract actionable points is becoming clearer every day. It’s more than just a rising tide lifting all boats in analytics. Snowflake has a competitive advantage by utilizing AI to help render insights.
The company not only warehouses data but allows customers to access it across numerous public clouds. So whether data is located on servers with Amazon‘s (NASDAQ:AMZN) AWS, Google Cloud, or Microsoft‘s (NASDAQ:MSFT) Azure, customers can access and analyze it. That partly explains SNOW stock’s performance following strong earnings from Amazon and Microsoft.
Snowflake has also been on a spending spree, buying up businesses in a bid to bring additional advanced AI and deep learning capabilities to the data cloud. It made four acquisitions in the past year.
Data continues to migrate from physical data centers to the cloud. Demands for ready access will continue to mount and drive usage of Snowflake’s platform forward. As one of the very few analytics firms specializing in multi-cloud offerings, SNOW stock has a commanding lead that should allow it to dominate for years to come.
On the date of publication, Rich Duprey 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.
