3 No-Brainer AI Stocks You Can Buy Right Now for $400

Amid fluctuating stock markets, this article highlights three AI stocks: Microsoft, Adobe, and Applied Materials, as great investment opportunities. With just $400, investors can tap into the potential growth of these industry leaders despite recent price drops, showcasing stability, innovation, and profitability in the AI space.

In the midst of a turbulent stock market, artificial intelligence (AI) stocks have proven to be both a beacon of prosperity and a source of decline. The S&P 500’s astounding performance in 2023 and 2024 was largely driven by these stocks, yet 2025 has witnessed a downward trend. Smart investors can seize this opportunity with an attractive entry point into market leaders in cloud computing, software, and semiconductors with just $400. Here are three enticing AI stocks to consider.

1. Microsoft (MSFT) – With deep roots in the AI world through its long-standing investment in OpenAI, Microsoft has captured the attention of developers with its cloud platform, Azure. Riding the wave of generative AI since late 2022, Azure generated impressive growth, with a 31% revenue increase driven by a staggering 157% boost in AI services year-over-year. Expectations of even greater revenue increases loom, thanks to soaring demand outpacing available capacity.

Microsoft’s enterprise software segment is experiencing technological uplift from its AI Copilot tools, enhancing productivity through its Office suite and Github for developers. Trading at approximately $370, a purchase of Microsoft stock could yield significant long-term benefits, despite a high forward price-to-earnings ratio of 28, thanks to its strong cash flow and share-buyback initiatives.

2. Adobe (ADBE) – Often seen as facing headwinds due to emerging AI tools, Adobe has taken a proactive approach by creating its own AI model, Firefly. By integrating Firefly’s capabilities—like Generative Fill and Text to Pattern—into its suite, Adobe appeals to creative professionals and marketers alike. Despite competition, Adobe’s high switching costs keep its user base loyal.

Adobe anticipates revenue growth from $21.5 billion in 2024 to $30 billion by 2027, reflecting a robust compound annual growth rate of 12%. With the stock trading at a mere 17 times its forward earnings, investors purchasing shares today are acquiring exceptional value poised for long-term growth.

3. Applied Materials (AMAT) – As the largest supplier of wafer fabrication equipment globally, Applied Materials stands vital in the semiconductor space, essential for AI applications. A virtuous cycle fuels its growth, allowing for significant investments in research and development, ultimately leading to superior advanced equipment and increased market share.

Management’s strong confidence is reflected through a dividend hike and a substantial share repurchase authorization, suggesting robust projected cash flow. With shares trading under $140, represented by a forward P/E of 14.8, investing in Applied Materials offers a chance to engage forever in a well-established company within a growing industry.

The landscape for AI stocks remains compelling, with Microsoft, Adobe, and Applied Materials presenting strong investment opportunities for those with $400 to invest. Each company is harnessing the power of AI to drive growth and enhance their market positions despite the industry’s recent volatility. As these giants continue to innovate and expand, they offer enticing prospects for long-term returns, validating the potential for savvy investors to capitalize on this technological wave.

Original Source: www.fool.com