Adobe (NASDAQ: ADBE) makes essential software for any digital creative. It’s the company behind Photoshop, Premiere Pro, and Illustrator, and it’s developing AI models to help creatives using its software get the most out of their tools.

Some investors worry that generative AI tools that can create images and videos could displace the need for some of Adobe’s software. But Adobe unveiled several improvements to its generative AI model, Firefly, last month that indicate AI is more of a benefit to its business than a threat. Firefly video generation for Premiere Pro, for example, can create commercially safe edits and fills, saving filmmakers time and resources. They won’t have to reshoot an entire scene just to correct a tiny mistake.

Management is monetizing its AI capabilities by offering tiered subscription offerings, add-ons that provide more access to AI tools, and direct AI access with Firefly services for creatives and GenStudio for marketers.

Its free Adobe Express service also integrates its Firefly model to “enable creativity for all,” as management says. The free service acts as a funnel to bring in new customers to Adobe’s software suite, and it’s working well. Management says potential customers that come to it through Express convert better into paid subscribers.

Adobe shares trade for less than 25 times analysts’ estimates for 2025 earnings, as of this writing. That’s a great price to pay for a company that should see steady revenue growth as customers pay up for its AI tools. Growing scale on the back of its AI investments should lead to modest margin expansion in the future as well, supporting strong earnings growth. Your $500 is just enough to buy a single share of this stalwart software provider that’s making some of the best AI tools for its industry.

Many see the growth of AI assistants like ChatGPT as a major threat to Alphabet‘s (NASDAQ: GOOG) (NASDAQ: GOOGL) core Google Search business. But Alphabet is investing heavily in AI to make sure that doesn’t become the case.

AI Overviews at the top of Google Search results have led to greater engagement and satisfaction among users, according to management. Other AI-driven features like Circle to Search in Android phones and Google Lens are driving search traffic to Search as well.

That’s important, because generative AI could have a meaningful impact on Google’s advertising business over the long run. Google’s AI model is called Gemini, and the company is infusing it into nearly every one of its marketing tools. Gemini helps advertisers create and test hundreds of different ads with different copy or images.

Google’s AI tools also help marketers direct their ad budgets toward higher-performing ads faster, maximizing their spend. Lastly, Google’s AI tools can help measure conversion using predictive analytics now that many users block direct ad attribution from sites and apps.

Meanwhile, Google Cloud remains one of the biggest public cloud providers, and it’s benefiting greatly from the growth in AI infrastructure spending. Google Cloud revenue grew 35% in the third quarter, reaching $11.4 billion. The segment’s operating income grew to $1.9 billion, from $266 million last year, and there’s still a long way for it to ramp up its margin, based on results from the competition. That could lead to strong overall earnings growth over the next few years.

Alphabet shares trade for just 20.3 times analysts’ 2025 earnings estimate, as of this writing. With the potential growth from AI-powered marketing and spend on Google’s cloud infrastructure, it’s well positioned to grow earnings at a strong rate that more than justifies that price for years to come.

Analysts currently expect Alphabet earnings to grow at an average rate of 22% per year for the next five years, making its current price multiple look like an absolute steal. With $500, you could pick up multiple shares of Alphabet, giving you multiple ways to invest in the future of AI.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,818!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,221!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $451,527!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 11, 2024

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adam Levy has positions in Adobe, Alphabet, and Microsoft. The Motley Fool has positions in and recommends Adobe, Alphabet, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

3 No-Brainer Artificial Intelligence (AI) Stocks to Buy With $500 Right Now was originally published by The Motley Fool