When it comes to investing, a $3,000 position may not sound like much. While it's not enough to deploy into multiple individual stocks, it's enough to allow one to take $1,000 positions in three different stocks, and that includes artificial intelligence (AI).

Due to a recent pullback in stocks, many AI stocks are on sale. Thus, now is likely an excellent time to take starter positions, and these stocks could serve investors well.

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Alphabet

When it comes to AI investing, it's likely too early to count out Google parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Alphabet first began using AI in 2001, and since then, it has been a pioneer in the technology.

It was only with OpenAI's generative AI breakthrough in 2023 that some began to doubt Alphabet's strength in the AI market. Although the company has followed up with Google Gemini and plans to spend $75 billion in capital expenditures (CapEx) in 2025 alone, Alphabet has not eased doubters' fears.

Nonetheless, the Google parent could easily rebound. Alphabet held about $96 billion in liquidity at the end of 2024, and it generated around $73 billion in free cash flow, a figure that does not include CapEx expenses. Those results show that it can afford such investments. Additionally, its massive ad business continues to grow revenue at double-digit rates, and the 31% revenue increase in Google Cloud shows that it's diversifying its revenue sources.

Investors should also remember that amid doubts, Alphabet stock has risen since OpenAI's generative AI breakthrough in 2023. Moreover, its price-to-earnings (P/E) ratio of 19 sits at a multi-year low, making it increasingly likely that now is an opportune time to add shares of this internet giant.

Meta Platforms

Facebook parent Meta Platforms (NASDAQ: META) built its success on becoming the dominant social media stock and creating a wildly successful digital ad business based on that.

However, with about 3.35 billion users logging on to a Meta-owned social media site daily, its sites seem to be approaching global saturation. Thus, after failing to draw investor interest through the metaverse, the company has pivoted into AI.

It has developed a generative AI assistant that helps Meta users generate images, personalize experiences, and use open-source AI. It just released Llama 4, its latest family of large language models, and a paid subscription service is also in the works. Thanks to sites such as Facebook and Instagram, Meta accumulated a treasure trove of data on much of the population that may give it a competitive advantage.

It holds about $78 billion in liquidity, not including the $52 billion it generated in free cash flow, leaving it with tremendous optionality regarding AI investing. With that, it announced plans to invest $60 billion to $65 billion in CapEx to stay competitive in the AI race.

Like Alphabet, Meta stock has risen steadily since Open AI's generative AI release. With a P/E ratio of 21, investors may want to consider this stock while it trades at a reasonable valuation.

Amazon

Amazon (NASDAQ: AMZN) has been adept at staying at the forefront of tech innovation, and AI is no exception. The company's cloud computing arm, Amazon Web Services (AWS), pioneered the cloud industry and remains the leading provider. However, since the cloud facilitates AI functionality in many cases, Amazon had to become adept with the technology to stay relevant in its field.

The e-commerce side of the business also uses AI. The technology personalizes customer experiences and improves the content and advertising appearing on its platform. In its third-party seller business, AI helps sellers streamline operations and provides overviews to evaluate a seller's performance.

Like its mega-tech peers, Amazon also plans to spend heavily on capital expenditures. It implied that it would spend $100 billion, most of which would go to AI. Investors should also like that it can probably afford these investments because it holds $101 billion in liquidity and generated $38 billion in free cash flow in 2024.

Indeed, Amazon stock has dropped dramatically in recent weeks amid the market sell-off. Nonetheless, investors should note that its P/E ratio has fallen to 31, a multi-year low for Amazon stock. That factor likely makes now a good time to add shares while the stock is comparatively inexpensive.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.

Conditions continue to work in favor of Taiwan Semiconductor Manufacturing (TSMC) (NYSE: TSM). The world's largest chip producer already controls two-thirds of the foundry market, according to TrendForce. Moreover, with artificial intelligence (AI) demand growing at a rapid clip, the need for the chips it produces only continues to rise.

Unfortunately, the healthy state of TSMC's business did not prevent a 35% drop in the stock price since January. However, with industry leadership and a diverse and desired client base, the short-term forces hammering TSMC stock are more likely a buying opportunity than a sign of a longer-term decline, and here's why.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

The state of TSMC

Other than TSMC's equipment maker ASML, few other AI stocks are in a stronger position. As the world's most advanced chipmaker, its clients are top chip design companies, including Nvidia, Advanced Micro Devices, Qualcomm, and Apple.

This market strength has unfortunately not stopped TSMC stock from falling. Geopolitical tensions with neighboring China are on the rise, and some investors fear for the future of the company should China invade the island. Also, investors fear the effect of tariffs on the company despite the Trump administration exempting semiconductors.

Nonetheless, TSMC seems to only extend its dominance, which makes its stock attractive with its lower price. TSMC's foundry market share grew more than 2 percentage points to 67% between the third and fourth quarters of 2024.

According to multiple reports, TSMC has also entered into a joint venture with Intel, the largest chip manufacturer in the U.S. This agreement could potentially offer tremendous benefits to both companies. With the move, TSMC diversifies its manufacturing base away from the geopolitical risks it faces in Taiwan. Additionally, manufacturing in the U.S. blunts the effects of possible U.S. tariffs and pacifies Intel, which had begun to emerge as a potential competitor.

Financials remain strong

Despite the recent drop in the stock price, TSMC's financial performance should make it more attractive to buyers over the long term. In 2024, revenue of $90 billion rose by 34% from year-ago levels. With that increase, gross margin rose by 2 percentage points to 56%, a testament to the company's rising efficiency.

Additionally, operating expenses dropped slightly as a percentage of revenue. That led to a comprehensive income of more than $39 billion, a 50% increase from year-ago levels.

Still, staying on top of demand and increasing its market share requires the company to invest heavily in building and maintaining foundries. Thus, it spent almost $30 billion in 2024 on property and equipment, just slightly less than it spent in 2023. Between rising demand for the most advanced semiconductors and the push to build more foundries in the U.S., investors should expect that level of capex spending to continue.

However, investors may find it easier to overlook those high fixed costs amid a lower valuation. TSMC's P/E ratio had exceeded 30 as recently as January. Today, its earnings multiple has fallen to just 21, and the forward P/E ratio of 16 indicates its rapid profit growth is likely to continue.

Consider TSMC stock

TSMC has become the dominant company in semiconductor manufacturing, and the deep discount in the stock price amid the stock sell-off makes it an even better buy.

Investing in TSMC does bring some degree of geopolitical risk, particularly with rising trade tensions. Nonetheless, virtually all top chip companies turn to TSMC to meet their manufacturing needs. Additionally, its new partnership with Intel addresses some of the geopolitical risks while turning a potential competitor into a partner.

Considering that investors can now buy this chip stock at a heavily discounted valuation, it has become an opportune time to buy shares.

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Will Healy has positions in Advanced Micro Devices, Intel, and Qualcomm. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Apple, Intel, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.