The Nasdaq has more than 2,500 companies in its exchange. While the Nasdaq has performed well, investors enjoyed higher returns with the Nasdaq 100. This index includes the 100 largest corporations by market cap that are already on the Nasdaq. Given this benchmark’s outperformance, it seems like a good idea to see which stocks are inside.
Unsurprisingly, investors will find many tech companies on the list. Many tech giants have diversified their revenue streams and have multiple opportunities to generate meaningful returns for shareholders. These corporations can also acquire smaller companies to capitalize on the latest trends. One multi-trillion-dollar tech giant ended up making the list.
However, there are two other companies to monitor that are worth buying with $500. While you’ll have to settle with fractional shares for one of those companies, you can buy a full share of the other company and still have some cash left over. These are some of the smartest Nasdaq stocks to buy with $500 right now:
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) boasts rising profit margins and improved revenue growth thanks to online advertising and cloud computing. Leadership has been paying more attention to the bottom line and has been making some cuts while delivering higher sales. Thus, I think it is one of the best Nasdaq stocks to buy.
Revenue increased by 15% year-over-year in the first quarter, while net income was up by 57% YoY. Investors have been scooping up shares, prompting a 29% year-to-date gain and a 221% increase over the past five years. Alphabet initially started slowly due to some Gemini mishaps, but those blunders are now distant memories. Advertising revenue continues to grow, and Google Cloud is growing even faster. This segment was up by 28.4% YoY, accounting for $9.6 billion of Alphabet’s $80.5 billion in Q1 2024 revenue.
Wall Street analysts are optimistic about the tech giant and rated it as a “Strong Buy.” The average price target suggests a 10% upside from current levels.
Costco (COST)
You’ll have to settle for a fractional share to put $500 into Costco (NASDAQ:COST). The wholesaler offers competitive prices for various products and generates recurring revenue from annual memberships. Those membership fees incentivize people to shop at Costco more often to make the most out of their memberships.
Wall Street analysts have rated the stock as a “Strong Buy,” with the highest price target of $960 suggesting a 13% upside. Costco has rewarded analysts’ enthusiasm in the past. Shares are up by 30% year-to-date and have more than tripled over the past five years.
Costco recently reported May sales results that indicate the company is still growing. Comparable sales increased by 6.4% YoY while the e-commerce segment was up by 15.3% year-over-year. Both of those growth rates represent acceleration from the company’s 39-week growth rates. Costco is a reliable wholesaler during economic booms and busts. People will always want to save money, and Costco specializes in that area.
CrowdStrike (CRWD)
CrowdStrike (NASDAQ:CRWD) is standing out from other cybersecurity stocks. The firm continues to report excellent revenue growth while competitors report decelerating revenue growth. CrowdStrike even offered strong guidance that suggests more growth is on the way.
Revenue increased by 33% YoY in the first quarter of fiscal 2025. The firm also closed out the quarter with $3.65 billion in annual recurring revenue. High revenue growth isn’t the only benefactor that’s been propelling the stock higher. Net income came in at $42.8 million compared to $0.5 million in the same quarter last year. Rising profits should help the P/E ratio and result in long-term gains for investors. That makes it one of the best Nasdaq stocks to buy, at least in my book.
CrowdStrike has certainly delivered for patient investors. Shares are up by 54% year-to-date and have gained more than 400% over the past five years. Wall Street is unanimous with its “Strong Buy” rating and believes that the stock has more room to run.
On this date of publication, Marc Guberti held long positions in GOOG and CRWD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
