Have $1,000 to Invest? Buy This Discounted Stock, Avoid the Other One

By Rich Duprey Updated Jul 2, 3:35PM EDT · Published Jul 1, 10:10AM EDT

Key Points in This Article:

Finding stocks to buy with $1,000 can be challenging in a market hitting new all-time highs.
Searching in the bargain bin can be useful, but requires discerning those with potential from thoe that are traps.

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Have $1,000 to Invest? Buy This Discounted Stock, Avoid the Other One — © Thinkstock

Since November 2022, the S&P 500 stands at approximately 6,205, reflecting a robust 55% gain, driven by strong performances in tech and consumer goods. The first half of 2025 mirrored last year’s solid returns, and finished the period with a strong 5% gain in June, a marked contrast to the 19% plunge between February and March.

This volatility serves as a stark reminder that market corrections — and even crashes — are inevitable. Yet, history offers reassurance: every bear market has been followed by a bull market that erases losses and fuels new highs. The S&P 500 closed yesterday at a new all-time high.

For patient, long-term investors who resist the urge to panic-sell, time in the market consistently proves rewarding. With a long enough horizon, virtually any moment is opportune for investing. If you have $1,000 to invest, and don’t need the money for bills or emergencies, there are many discounted stocks to choose from. Below are two that are down 35% or more, but only one is worth your time. Invest wisely.

Reddit (RDDT)

Reddit (NASDAQ:RDDT | RDDT Price Prediction) appears enticing with its social media growth, but it’s a risky bet for your $1,000, especially for conservative investors. In the first quarter, Reddit reported a 61% revenue surge to $392 million, driven by digital advertising, which accounts for over 90% of its income. Adjusted earnings of $0.13 per share beat estimates of just $0.02 per share as daily active users jumped 31% year-over-year to 108.1 million globally, with U.S. users rising 21%.

However, a concerning trend persists: logged-in users grew only 23%, while logged-out users, who merely browse without engaging, rose 38%, comprising 55% of daily users (up from 52% in 2024). This signals declining user engagement, critical for Reddit’s ad-driven model, as non-logged-in users don’t create or comment, reducing ad value.

At $150 per share, RDDT stock is down 35% from its 52-week high and trades at 64 times 2026 earnings, 19 times sales, and 88 times free cash flow. Those are exorbitant valuations for a company yet to achieve consistent profitability. It poses risks of sharp declines, especially in a turbulent market. Regulatory scrutiny over content moderation and data privacy further clouds its outlook.

For investors seeking a discounted stock to buy with their $1,000, Reddit’s speculative nature and lack of dividends make it a stock to avoid,. Its high price doesn’t justify the risks.

QXO (QXO)

Instead, put your money into QXO (NYSE:QXO). Led by billionaire consolidator Brad Jacobs, QXO is a compelling choice for your $1,000 investment due to its transformative potential in the building products distribution sector.

Trading at over $21 per share, QXO is down 86% year-over-year, due to a rare technical move last year related to low volume before more shares were registered, but up 36% in 2025 as Jacobs executes his bold strategy to consolidate a fragmented $800 billion industry. Starting with QXO’s $11 billion acquisition of Beacon Roofing Supply in April, Jacobs aims to scale QXO to $50 billion in revenue by 2035 by leveraging disciplined acquisitions, technology-driven synergies, and high-single-digit market growth.

Analysts at Truist conservatively project QXO reaching $34 billion in revenue by 2030, yielding earnings of $2.25 per share or more, with a $30 price target, giving it a 2026 enterprise value-to-EBITDA (EV/EBITDA) ratio of 26x. The stock’s current 38x P/E and 19x EV/2026 EBITDA align with top distributors, but its long-term potential — a 13x P/E on 2030 estimates — suggests significant upside.

Jacobs’ proven track record with similar ventures, including United Rentals (NYSE:URI) and XPO Logistics (NYSE:XPO), bolsters confidence, as does QXO’s access to equity capital for deals at attractive prices in a recovering residential market.

Risks include integration challenges and macroeconomic headwinds, but QXO’s tech-infused approach and Jacobs’ deal-making prowess mitigate these. It looks like QXO lost to Home Depot (NYSE:HD) in a bidding war to acquire GMS, a drywall and interior construction distributor, but QXO offers tremendous growth potential without excessive volatility. It makes QXO stock ideal for investors seeking to invest $1,000 in long-term value creation over speculative bets like Reddit.

About the Author Rich Duprey →

After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, and Money Morning. He has been interviewed for both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.