Three Must-Consider AI Stocks You Can Buy With $500 Today

Artificial intelligence (AI) has become a major force driving stock market performance, with many companies seeing their share prices rise. However, some stocks stand out as particularly attractive investment opportunities in the AI space. Here, we highlight three AI stocks that you can buy for $500 or less.

1. Palo Alto Networks

Palo Alto Networks (PANW) is a leading provider of cybersecurity services, benefiting from the increased demand for security solutions as businesses shift toward hybrid computing models and remote work. With the rise in online threats, companies are more inclined to invest in robust security systems to protect sensitive data.

At the heart of Palo Alto's success is its advanced AI technology. By utilizing machine learning, the company processes vast amounts of data from various security tools to identify and neutralize potential threats effectively. This gives Palo Alto a significant edge over its competitors, as more data leads to improved threat detection capabilities.

Palo Alto is also transitioning more customers to software-based solutions, which favorably impacts its profit margins. The company's gross margin improved from 72% in fiscal 2023 to 74% last year. At an enterprise value-to-revenue ratio of 13.6, this stock represents a fair investment for those looking to take advantage of its growth trajectory.

2. Adobe

Adobe (ADBE) has established itself as a key player in the generative AI arena, specifically for creative endeavors such as image and video production. The company’s Firefly AI model is distinct, as it is trained on its library of stock media, setting it apart from other AI tools.

Adobe's integration of AI features into its creative and document software suites offers valuable advantages for businesses in need of innovative marketing solutions. With the introduction of GenStudio, companies can effectively develop advertising campaigns by leveraging AI-powered tools.

While some critics see AI as a competitive threat to Adobe’s offerings, it is essential to recognize that new tools are expanding the overall market rather than diminishing Adobe's standing. The company remains a staple among professional creatives who rely on its industry-standard software, and recent updates have allowed Adobe to increase subscription prices without losing customers. The stock currently trades at just under 22 times its expected future earnings, providing good value given its growth potential.

3. Salesforce

Salesforce (CRM) offers a comprehensive suite of software solutions, focusing primarily on customer relationship management, marketing automation, and data analysis. The company has successfully implemented a land-and-expand strategy, where initial service offerings lead to broader engagements over time.

This expansion is facilitated by Salesforce's extensive data collection, providing unique insights into its enterprise customers. CEO Marc Benioff describes this as an "unfair advantage," especially for the company's newest product, Agentforce. This AI-driven tool allows businesses to automate decisions and actions based on the data collected, increasing efficiency and generating additional revenue.

While Salesforce shares trade for about 31 times analysts’ earnings estimates for the 2026 fiscal year, the potential revenue growth from its AI initiatives justifies the investment. Given its positive outlook, investors may find it prudent to allocate a portion of their $500 to Salesforce.

In summary, investing in AI-related companies such as Palo Alto Networks, Adobe, and Salesforce provides an opportunity to tap into the tremendous potential of artificial intelligence. With just $500, investors can position themselves to benefit from the ongoing advancements and growth in this innovative sector.

AI, Stocks, Investing