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

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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) 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, 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.

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