If you have $5,000 to put into the market, first take a moment to congratulate yourself. That's no small accomplishment and it's worth celebrating.
Now it's time to act. If you have a low-risk tolerance, you can buy index funds and exchange-traded funds (ETFs). If you're willing to accept significant risk, you may be tempted to buy Bitcoin. You aren't lacking for alternatives.
But if you're reading this, you're likely to be invested in one or more individual stocks. So, in this special presentation, we're looking at seven stocks that are good options for investing that $5,000.
In the last 10 years, the average total return for S&P 500 stocks has been 12.9%. So, for this list, we used a projected stock price gain of at least 15% for the next 12 months as the floor. Of course, nobody can predict future stock price performance, but these stocks have a high probability of outpacing the broader market in 2025.
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- NVIDIA
- Microsoft
- Eli Lilly & Co.
- Freeport-McMoRan
- Occidental Petroleum
- Barrick Gold
- DraftKings
#1 - NVIDIA (NASDAQ:NVDA)
The gains that investors have made in NVIDIA Corp. (NASDAQ: NVDA) may make you think that it’s too late to make a profit from this stock. But the company’s latest earnings report revealed why that’s simply not the case.
Demand for the company’s current and next generation of graphic processing units (GPUs) remains strong. In fact, the company described demand as “incredible.” In fact, the only factor that could hold back further revenue gains in 2025 would be an inability to keep up with the insatiable demand, which is unlikely.
As of November 27, 2024, NVDA stock had pulled back about 3.5% since the company reported earnings. However, more than a dozen analysts have increased their price targets since the company’s earnings report. The consensus price target of $164.15 offers investors more than 21% upside. And with earnings expected to grow by up to 41% in the next 12 months, that consensus price may move higher in the coming quarters.
About NVIDIA
NVIDIA Corporation provides graphics and compute and networking solutions in the United States, Taiwan, China, Hong Kong, and internationally. The Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU or vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building and operating metaverse and 3D internet applications.
Read More - Current Price
- $135.34
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 40 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $164.15 (21.3% Upside)
#2 - Microsoft (NASDAQ:MSFT)
Microsoft Corp. (NASDAQ: MSFT) is another big tech stock to consider with an investment of $5,000. From software licensing and cloud computing to cybersecurity and artificial intelligence (AI), it’s hard to think about a sector of the tech landscape where Microsoft isn’t among the leaders. That shows up in the company’s revenue and earnings which continue to move higher year over year.
MSFT stock is up 13.8% in 2024 as of the market close on November 27. That’s above the average total return in the stock over the last three years, but it pales in comparison to a stock like NVIDIA. But that’s an opportunity that investors can profit from. Analysts have a consensus price target of $503.03, which gives the stock an 18% upside.
And don’t forget that Microsoft is an excellent dividend stock. The yield of 0.73% isn’t particularly impressive, but the company has increased its dividend in each of the last 23 consecutive years.
About Microsoft
Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.
Read More - Current Price
- $422.99
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 27 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $503.03 (18.9% Upside)
#3 - Eli Lilly & Co. (NYSE:LLY)
One of the hottest trends in 2024 started in 2022 when the first GLP-1 drugs were introduced. Eli Lilly & Company (NYSE: LLY) is one of the industry leaders with its Mounjaro (for diabetes) and Zepbound (for weight loss) GLP-1 drugs.
These two drugs now account for nearly 40% of the company’s revenue. And that’s likely to remain the case if not increase in coming years. To begin with, the existing addressable market is likely to increase as more data becomes available on the long-term performance of these drugs. Plus, Lilly is looking to get the drugs approved for more indications including sleep apnea and even heart failure.
LLY stock is up 35.2% in 2024 as of November 27. And at over $780 a share, it’s one of the most expensive stocks on this list. However, that includes a drop of nearly 11% in the month of November after the company posted disappointing earnings. Analysts have lowered their price targets but still have a consensus target of $1,007.94 which would be a gain of over 27%.
About Eli Lilly and Company
Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide. The company offers Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, and Humulin U-500 for diabetes; Jardiance, Mounjaro, and Trulicity for type 2 diabetes; and Zepbound for obesity.
Read More - Current Price
- $788.35
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 17 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $1,007.94 (27.9% Upside)
#4 - Freeport-McMoRan (NYSE:FCX)
If you’re an investor with a long-term focus, Freeport-McMoRan Inc. (NYSE: FCX) presents an intriguing option. The reason for that is the expected copper shortage that’s expected to hit the market in 2028. In 2023 and 2024, demand for copper in many of its core markets (electric vehicles among them) has dried up.
Some will argue that demand for copper in areas like wind turbines and solar panels may remain depressed in a Trump administration. That remains to be seen. But we know that demand for data centers will remain strong. And that will require copper.
Freeport-McMoRan is one of the world’s largest copper miners, with seven different mines in Arizona and New Mexico. The company plans to increase its annual production from 230 billion pounds to over 800 billion pounds.
While the demand for copper may take several years to emerge, analysts have a 12-month price target of $54 on FCX stock. That’s a gain of over 23%, and the company also pays a dividend, which would be attractive considering that you could buy over 100 shares of FCX stock for $5,000.
About Freeport-McMoRan
Freeport-McMoRan Inc engages in the mining of mineral properties in North America, South America, and Indonesia. It primarily explores for copper, gold, molybdenum, silver, and other metals. The company's assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Chino and Tyrone in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile.
Read More - Current Price
- $43.75
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 9 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $54.00 (23.4% Upside)
#5 - Occidental Petroleum (NYSE:OXY)
The inability of the price of crude oil to get traction above $70 a barrel is sending mixed signals about the economy. But the pullback in oil stocks is something that Warren Buffett has frequently regarded as an opportunity to buy Occidental Petroleum Corp. (NYSE: OXY) stock. In fact, OXY has been one of Buffett’s favorite stocks in the last five years.
With lower interest rates signaling the likelihood of economic expansion, it’s likely that oil production, which is already at record levels, is about to increase even more. And that makes a company like Occidental Petroleum, which already has one of the best profit margins in the sector, a strong addition to a portfolio.
OXY stock is down approximately 16.5% in 2024. That has it trading at a discount of about 25% to the consensus price target of $63.25. And investors also get a dividend which was strategically slashed in 2020 but has come roaring back.
About Occidental Petroleum
Occidental Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, and North Africa. It operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing. The company's Oil and Gas segment explores for, develops, and produces oil and condensate, natural gas liquids (NGLs), and natural gas.
Read More - Current Price
- $50.34
- Consensus Rating
- Hold
- Ratings Breakdown
- 7 Buy Ratings, 12 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $63.25 (25.6% Upside)
#6 - Barrick Gold (NYSE:GOLD)
Gold has been one of the best-performing asset classes in 2024. And while many investors don’t want the responsibility of owning physical gold, they’re looking for ways to get involved. With a $5,000 investment, looking at gold miners is a sensible choice which leads us to Barrick Gold Corp. (NYSE: GOLD).
Barrick is one of the world’s largest gold miners and its flagship Cortez Gold Mine in Nevada has been operating for over 50 years. The company is projecting gold production of between 3.9 and 4.3 million ounces in 2024. It’s also anticipating production to increase by 30% by 2030.
At first glance, investors will look at a 2.5% decrease in the GOLD stock price in 2024 and think it to be a poor investment. But mining stocks will always trail behind the price of the underlying commodity. But with demand for gold remaining strong, so do the growth prospects for GOLD stock.
About Barrick Gold
Barrick Gold Corporation is a sector-leading gold and copper producer. Its shares trade on the New York Stock Exchange under the symbol GOLD and on the Toronto Stock Exchange under the symbol ABX.
In January 2019 Barrick merged with Randgold Resources and in July that year it combined its gold mines in Nevada, USA, with those of Newmont Corporation in a joint venture, Nevada Gold Mines, which is majority-owned and operated by Barrick.
Read More - Current Price
- $17.58
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $25.60 (45.6% Upside)
#7 - DraftKings (NASDAQ:DKNG)
DraftKings Inc. (NASDAQ: DKNG) is an investment in the gaming industry including the increasingly lucrative sports betting industry. The company, along with FanDuel whose parent company is Flutter Entertainment plc. (NYSE: FLUT) control the lion’s share of the sports betting market. That now includes 38 states, but has an opportunity to grow as Texas, California, and Florida have yet to legalize sports betting.
In addition to sports betting, DraftKings has an online casino and owns the Vegas Sports Information Network (VSiN), a multi-platform broadcast and content company. And in February 2024, the company acquired the online lottery platform, Jackpocket.
In its November 2024 earnings report, DraftKings posted year-over-year revenue growth of 39%. If investors should have any concerns it would be that the company is not yet profitable and isn’t projected to reach that milestone until 2025. But with a consensus price target of $51.04, you have a potential 18% upside.
About DraftKings
DraftKings Inc operates as a digital sports entertainment and gaming company in the United States and internationally. It provides online sports betting and casino, daily fantasy sports, media, and other consumer products, as well as retails sportsbooks. The company also engages in the design and development of sports betting and casino gaming software for online and retail sportsbooks, and iGaming operators.
Read More - Current Price
- $43.03
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 23 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $51.04 (18.6% Upside)
As you can see, this is just a small sample of the stocks you can confidently buy with $5,000. Not surprisingly, many of these stocks are in the technology sector. In fact, we could have stayed exclusively in the technology sector. But we wanted you to come away with the knowledge that there's a depth and breadth to this market that goes beyond technology stocks.
And investors should also keep their eyes on several stocks like Costco Wholesale Corp. (NASDAQ: COST) which didn't make this list because of its current stock price of over $900 per share. However, if the company were to split its stock, it could be an ideal option.
Each of the stocks on this list is priced so that you can buy many full shares with $5,000. In fact, some of the stocks are priced so you can buy 100 or more shares. However, while you shouldn't pursue a strategy of diversification for its own sake, it's important to consider spreading that $5,000 over more than one stock and sector. That's a solid way to help protect you against the downside risk that comes from any individual stock.
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