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

After a fast start to the year, the Nasdaq Composite index is taking a breather. And with the recent dip, even some of the most dominant stocks are experiencing some weakness. The so-called "Magnificent Seven" aren't immune.

Look at Amazon (NASDAQ: AMZN) . The tech giant recently was trading 8% off its peak, which presents investors with a rare opportunity to scoop up shares. Here are four reasons Amazon is the ultimate growth stock to buy with $1,000 right now.

Moat

While investors often get excited about owning earlier-stage companies that seemingly have much greater growth prospects, these types of situations are often very risky. With Amazon, the risk is much lower given just how dominant the business is and the presence of a wide economic moat . These competitive advantages are one key reason to buy shares.

For starters, the business's sprawling e-commerce operations benefit from the network effect. Having more merchants makes the online marketplace extremely valuable to customers because there is greater choice. And more shoppers create more revenue-generating opportunities for sellers.

Amazon also benefits from scale advantages. The company has invested aggressively to develop its massive logistics footprint to the point that it's economical to provide fast and free shipping to its Prime members. Smaller rivals can't compete with this favorable setup.

Financials

Despite being a large enterprise, Amazon continues posting solid growth. Revenue rose 10% in the second quarter (ended June 30) to $148 billion. While the online stores division was a laggard with a sales gain of 5%, digital ad revenue and cloud revenue at Amazon Web Services (AWS) soared 20% and 19%, respectively.

Looking ahead, management expects revenue to total between $150 billion and $158.5 billion, an increase of between 8% and 11%.

CEO Andy Jassy and his leadership team have embarked on meaningful cost-cutting measures to create a more financially fit business. Net income doubled year over year to $13.5 billion. That's a drastic reversal from the $2 billion net loss registered two years earlier in Q2 2022.

Tailwinds

Amazon is a unique company because it benefits from numerous secular trends. These tailwinds should help boost sales over the long term. In fact, Wall Street consensus analyst estimates see Amazon's revenue rising at a compound annual rate of 11.2% between 2023 and 2026. That's definitely an encouraging outlook.

Investors are familiar with Amazon as the leader in e-commerce. According to Statista, nearly 40% of all money spent online in the U.S. goes through Amazon.com. As spending shifts away from brick-and-mortar retailers, Amazon will keep gaining.

With AWS, the business has the leading cloud computing platform in the world. Investments to boost AI capabilities will make AWS a more mission-critical partner for its clients.

Then there's streaming entertainment. Data from Nielsen lists Prime Video as the third most popular streaming service  when it comes to daily TV viewing in the U.S. Cord-cutting is showing no signs of slowing down.

Amazon is also now a major player in the digital ad market, raking in $12.8 billion in ad sales just in the last quarter. Grand View Research believes the global digital ad industry will be worth nearly $1.2 trillion by 2030, giving Amazon plenty of room to grow this segment.

Valuation

As of this writing, shares trade at a price-to-sales ratio of just under 3.3. While that's much more expensive than Amazon's 1.7 multiple at the start of 2023, it's about in line with the stock's trailing-10-year average. The latest price drop helps in this regard.

The current valuation, which I view as reasonable, is another compelling reason that Amazon is the ultimate growth stock to buy with $1,000 right now.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, 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 Amazon. The Motley Fool has a disclosure policy .