The Ultimate Growth Stock to Buy With $1,000 Right Now

Key Points

• Amazon is benefiting from growth in AI cloud services and advertising.

• The company has $66 billion in cash to use toward future growth.

• Amazon's stock valuation is at its lowest level in years, making its shares a good value.

• 10 stocks we like better than Amazon ›

Plenty of great growth stocks are available to investors across all sectors, and many of them will end up being fantastic places to put your money over the long term. But if you have $1,000 to work with and can only buy one growth stock right now, there's a case to be made for Amazon (NASDAQ: AMZN).

The company is known for its dominance in e-commerce, but there's far more to Amazon's growth potential than just its online marketplace. Artificial intelligence and advertising are both huge opportunities for Amazon, and the company's superb cash stockpile puts it in a perfect position to adapt to an ever-changing business environment. Here's why it's a top growth stock to buy now.

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Image source: Getty Images.

It's tapping into the AI boom

Amazon is a key player in the AI space, thanks to its early lead in cloud computing. Amazon Web Services (AWS) holds about 30% of the cloud market, outpacing Microsoft's Azure with 21%, and as more companies look to the cloud for their artificial intelligence needs, Amazon should benefit.

AWS generated more than $29 billion in sales in the most recent quarter and generated $11.5 billion in operating income. That's a strong showing from this business segment, and Amazon is likely to continue tapping further into cloud computing, with global AI cloud revenue estimated to reach $2 trillion by 2030.

AWS is still one of Amazon's fastest-growing segments and one of its most profitable as well. With the AI race well underway, Amazon could see many more years of growth as it benefits from its leasing position in this market.

Advertising sales are on a tear

It's easy to skip over Amazon's advertising business because, for years, it wasn't a huge part of the company's growth strategy. But things have changed over the past few years, and now advertising is Amazon's fastest-growing business, with sales rising by 18% in the first quarter to $13.9 billion.

Amazon has a unique position in the advertising market not just because it owns the platforms it sells ads on, like its Amazon Prime video streaming service and its e-commerce platform, but because sellers on its marketplace pay for ads. This means that Amazon makes money both from sellers placing ads on its e-commerce site and when people sell products on the site.

This helps insulate Amazon from the ups and downs that other ad companies experience. eMarketer estimates that Amazon's growth in the U.S. digital ad market will give the company a 17% market share by next year.

Amazon is in a strong financial position for more growth

One thing you should always be on the lookout for in any growth stock is whether the company has enough money to seize new opportunities. This could be through acquisitions, launching a new product, or reinvesting funds into what's already working. With Amazon, there's no doubt the company can handle all three -- and then some.

Amazon ended the first quarter with $66 billion in cash and cash equivalents, which means the company is well-positioned to invest in its future, no matter what new trends emerge. Amazon hasn't been afraid to take big bets in the past -- including moving into healthcare, grocery stores, and video streaming -- so you can bet the company is on the lookout for the best way to deploy its cash.

One bonus reason to buy Amazon stock right now

In addition to all of the reasons above, buying Amazon stock right now looks like a smart choice because the company's shares are well-priced. Amazon stock has a price-to-earnings ratio of 34, far below its P/E high of about 300, which its shares reached a couple of years ago.

With this growth stock trading at one of its lowest P/E multiples in years, now looks like a fantastic time to put $1,000 toward Amazon.

Should you invest $1,000 in Amazon right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon 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.