The Best Stocks To Invest $5,000 in Right Now

Many investors kept their powder dry for much of 2022. No one can be blamed for building up their cash holdings amid significant market volatility. However, at least some of that money could be coming from the sidelines now, as the stock market has been moving in a positive direction so far this year.

Where should investors put their money? There are many good opportunities. Here are my picks for the best stocks to invest $5,000 in right now.

1.Amazon

When Bill Miller says a stock is a good pick, it’s worth listening. And that’s exactly what the famous investor said Amazon (AMZN -0.64%) in January. Notably, Miller called Amazon “one of the easiest names out there right now.” I agree.

This optimism about Amazon isn’t just because the stock remains more than 40% below its previous high (although it is). The primary reasons for investing in Amazon are that (1) the company’s prospects are improving and (2) its valuation does not reflect that improvement.

As Exhibit A, consider inflation. Federal Reserve Chairman Jerome Powell said this week that the “disinflationary process, the process of bringing inflation down, has begun.” This is great news for Amazon, which has attributed much of its slowing growth to skyrocketing inflation.

Also, Amazon has lowered the cost. Those moves should result in higher profitability and stronger free cash flow. If a new bull market begins, Amazon should be among the big winners as investors gain a renewed appreciation for this seedy e-commerce and cloud hosting behemoth.

2. Alphabet

Never underestimate alphabet (GOOD -0.63%) (GOOGL -0.46%). However, I think some investors have ignored this advice lately. They joined the talk that OpenAI’s ChatGPT poses something of an existential threat to Google. I suspect that we will soon see things differently.

Alphabet launches its rival to ChatGPT, Google Bard. Of course, the first release will be based on what the company calls its “lightweight” version of its large language model, LaMDA. That could mean users are seeing more inaccuracies than they’d like. However, it is only a matter of time before the full version will be available.

But don’t invest $5,000 in Alphabet stock just because they might have the next shiny new toy that’s going to turn heads. LaMDA’s incorporation into Google Search could ultimately boost ad revenue, rather than resulting in a drop as some are expecting. Alphabet’s integration of tools and application programming interfaces (APIs) for AI technology into its Google Cloud services could also attract more customers to its rapidly growing cloud hosting business.

Like Amazon, Alphabet should benefit if the macroeconomic picture improves. When that happens (which it will sooner or later), the stock will almost certainly rise as ad revenue picks up steam again.

3. Vertex Pharmaceuticals

I could sing the praises Apex Pharma (VRTX 1.99%) until my face is blue. But I won’t. Instead, let me outline just three compelling reasons to buy the stock now.

First, Vertex is pretty isolated from what’s happening with the economy. Patients will take their cystic fibrosis (CF) drugs, and insurers will pay for those drugs regardless of inflation and gross domestic product (GDP) numbers. This gives Vertex a level of resilience that most stocks just don’t have. We saw that clearly during last year’s gloomy market environment.

Second, Vertex has a clear catalyst in the near future. The company and its partners, CRISPR therapeutics (CRSP -2.54%), could receive regulatory approvals for Exa-Cel as early as the second half of this year. The therapy, which has the potential to cure sickle cell disease and transfusion-dependent beta-thalassemia, is on track to become the first CRISPR gene-editing therapy on the market.

Third, Vertex’s long-term prospects look even brighter. CEO Reshma Kewalramani said in the company’s latest quarterly update that Vertex could launch new products in five disease areas within the next five years. She stated, “Each program has the potential to be best-in-class and transformative of the disease, and each represents a multi-billion dollar market opportunity.”

The ability to perform well in good and bad markets. An important catalyst on the way. Exceptional long-term growth opportunities. If that’s not enough to attract some money from the sidelines, I don’t know what will be.