My 3 Favorite Stocks to Buy Right Now

As investors navigate a landscape of shifting valuations and macroeconomic headwinds, identifying companies that blend strong fundamentals with undervalued pricing is critical. Three stocks—Microsoft, Meta, and Amazon—stand out for their resilience, strategic AI-driven growth, and compelling discounts to fair value. Here’s why they belong on your radar.

1. Microsoft (MSFT): The Undisputed Tech Leader

Microsoft remains a pillar of the tech sector, with its cloud division Azure defying expectations by growing 35% year-over-year despite capacity constraints. Analysts at Morningstar highlight its 4-star rating and a 14% discount to fair value, making it a “core holding” for long-term portfolios.

While MSFT has risen 12% since its recent earnings report, the stock still trades below its intrinsic value. Azure’s dominance in enterprise cloud infrastructure, coupled with its AI integration (e.g., Copilot), positions Microsoft to capitalize on the $1.3 trillion cloud market. Management’s disciplined capital allocation and lack of tariff-driven customer churn further solidify its moat.

2. Meta (META): Resilience in Ad Tech and AI

Meta’s 4-star rating and 22% discount to fair value reflect its ability to sustain ad revenue growth amid a turbulent digital economy. Analysts praise its margin expansion and AI investments, which are expected to drive new monetization avenues—such as advanced ad targeting and generative AI tools for businesses.

Despite skepticism around its Metaverse ambitions, Meta’s core business remains robust. Its $13 billion in Q1 profits underscore the durability of its social media ecosystem. Risks include overexposure to China (20% of Arm’s revenue, a key partner), but Meta’s focus on AI could offset near-term capex concerns.

3. Amazon (AMZN): Long-Term Value in AWS and Innovation

Amazon’s 21% discount to fair value and 4-star rating signal a compelling entry point. While AWS grew 16% in Q1—lagging Microsoft’s Azure—analysts emphasize its long-term strategic investments. One-time costs tied to Project Kuiper (its satellite internet venture) have pressured margins, but these expenditures are expected to pay off as AWS expands into edge computing and AI.

Amazon’s broader ecosystem, including Prime and its retail operations, also provides a stable cash flow base. The stock’s valuation discount reflects near-term execution challenges, but its AI-driven tools (e.g., Bedrock) and global scale suggest it’s undervalued relative to its growth trajectory.

Conclusion: Why These Stocks Win Now

The trio—Microsoft, Meta, and Amazon—offer a blend of defensive strength and innovation-driven growth. Microsoft’s Azure and AI ecosystem, Meta’s ad tech resilience, and Amazon’s AWS dominance all align with secular trends in cloud computing and AI adoption.

Crucially, their discounts to fair value—14%, 22%, and 21% respectively—provide a margin of safety. While risks like U.S.-China trade tensions and overvaluation in sectors like cybersecurity (e.g., Palo Alto Networks) loom, these three stocks stand out for their ability to navigate headwinds.

Investors should prioritize these names as core holdings, especially as AI adoption accelerates. With valuations still below intrinsic worth and earnings momentum intact, now is the time to act.

Data as of May 2025. Past performance does not guarantee future results.