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

It's understandable if investors believe that to achieve outsize returns, it's necessary to find under-the-radar businesses that can grow rapidly. But this just isn't true. Compelling investment ideas could be hiding in plain sight.

There's one fantastic company whose shares have catapulted 1,090% higher in the past decade. This enterprise is currently valued at greater than $2 trillion, but I believe it still deserves a closer look.

Here's the ultimate growth stock to buy with $1,000 right now, which would afford you five shares.

Secular trends

The business in question is none other than Amazon (NASDAQ: AMZN) . The tech titan is one of the most well-known companies on Earth. Despite its scale, as exemplified by trailing-12-month revenue of $591 billion, there is still meaningful growth potential in the years ahead, thanks to multiple secular tailwinds.

With a whopping 38% share of all online retail sales in the U.S., Amazon is the clear leader in the e-commerce space. This has been true for a long time. The business sells virtually every product category you can think of, a far cry from the days when all it offered was books.

According to the Federal Reserve Bank of St. Louis, 84% of retail spending in this country is still represented by brick-and-mortar shopping. Amazon is in a prime position to benefit as online shopping increases its penetration rate over time.

Another growth area is streaming entertainment. The decline of traditional cable TV bundles has made way for new on-demand services to flourish. With Amazon Prime Video, which has more than 200 million members, the company has a top competitor in the so-called streaming wars.

Prime Video also gives Amazon a hand in the digital ad industry. Given that the popular amazon.com site attracts billions of visitors each month, the business has opportunities to monetize this attention via advertising revenue. While Alphabet and Meta Platforms currently dominate the digital ad market, Amazon is in the third position in terms of revenue share.

The company should see healthy sales growth for a long time as it benefits from long-term tailwinds in the e-commerce, streaming, and digital ad industries.

Investing in AI

Astute readers will notice that a crucial segment still hasn't been discussed. And that's Amazon Web Services (AWS), the company's cloud computing segment that commands industry-leading market share. It's important to understand that the shift of businesses spending more money on off-premises tech infrastructure will continue to propel Amazon.

AWS is a major growth engine, as sales were up 17% in the first quarter of 2024 (ended March 31). Moreover, it's an extremely profitable segment, reporting an outstanding operating margin of 37.6% in Q1. The entire company's profitability can mostly be attributed to AWS.

This division also positions Amazon favorably in the artificial intelligence (AI) race . I believe that AI, regardless of how much excitement there seems to be, won't necessarily create groundbreaking new products and services. Instead, I think AI can bolster existing offerings that companies already provide to their customers.

By more aggressively leaning into AI innovation and capabilities, AWS is poised to become an even more mission-critical partner to its client base. With plans to invest $100 billion in data centers over the next 10 years to expand AI capacity, the business is positioning itself for lasting success.

What about the valuation?

Despite Amazon's monster performance historically, which has surely made some investors rich, the stock still looks reasonably valued today. This might be surprising to market observers who believe they might have missed the boat.

The company's market cap is about 20 times the company's estimated 2026 free cash flow (FCF) of about $100 billion. Because of the likelihood that FCF is poised to grow for many years, this looks like a compelling entry point.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. 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. Neil Patel and his clients have 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 .