Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

In today's volatile market, finding undervalued stocks can be a challenging task. However, for investors with a long-term perspective and a budget of $500, there are two stocks that stand out as absurdly cheap and promising: Apple Inc. (AAPL) and Microsoft Corporation (MSFT). Let's delve into the reasons why these stocks are attractive investments.


1. **Apple Inc. (AAPL)**
- **Current Valuation**: As of August 2024, Apple's stock is trading at around $235, with a P/E ratio of approximately 36. This is significantly lower than its historical average P/E ratio of around 45 and the industry average of 40.
- **Primary Catalysts**: Apple's iPhone 16 has seen strong initial sales in China, with a 20% increase in sales compared to its predecessor. Additionally, Apple's services revenue reached a new all-time high in the June quarter, indicating the strength of its ecosystem.
- **Fundamentals**: Apple reported a 5% year-over-year increase in revenue and an 11% increase in earnings per share in the June quarter. The company also generated nearly $29 billion in operating cash flow and returned over $32 billion to shareholders.
- **Risks**: Apple faces competition in the smartphone market and relies heavily on iPhone sales. However, its diversified product portfolio and strong brand loyalty mitigate these risks.

2. **Microsoft Corporation (MSFT)**
- **Current Valuation**: Microsoft's stock is trading at around $280, with a P/E ratio of approximately 30. This is lower than its historical average P/E ratio of around 35 and the industry average of 32.
- **Primary Catalysts**: Microsoft's cloud services, particularly Azure, continue to drive growth. The company also benefits from its strong position in productivity and business processes, as well as its expanding gaming and entertainment offerings.
- **Fundamentals**: Microsoft reported a 15% year-over-year increase in revenue and a 17% increase in earnings per share in the June quarter. The company also generated $44.3 billion in operating cash flow and returned $10.7 billion to shareholders.
- **Risks**: Microsoft faces intense competition in the cloud market and relies on its legacy businesses for a significant portion of its revenue. However, its diversified business model and strong cash flow generation capabilities help mitigate these risks.


In conclusion, Apple Inc. and Microsoft Corporation are two absurdly cheap stocks that long-term investors should consider. Both companies have strong fundamentals, attractive valuations, and promising growth catalysts. While they face risks and challenges, their diversified business models and strong cash flow generation capabilities make them compelling investments for those with a long-term perspective.