Amazon: The Growth Stock No One Trusts (But Everyone Buys)

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Every investor is a growth investor, in my opinion. No one wants to see their portfolio resemble a sad trombone. Even if you’re focused on income, you’d still love to see your investments appreciate-assuming they don’t vanish like a poorly timed joke.

Not every growth stock is ideal for every growth investor, though. Some are too speculative for risk-averse investors. However, a select few could be appealing to most investors. Here’s my pick for the ultimate growth stock to buy with $1,000 right now. (Spoiler: It’s not a stock. It’s a lifestyle.)

An impressive growth story so far

I didn’t have to search for an obscure stock that few investors have on their radar screens. Pretty much everyone has heard of Amazon (AMZN). Millions of people regularly use the company’s products and services-assuming they haven’t accidentally ordered a lifetime supply of rubber chickens.

Amazon has unquestionably been an impressive growth story so far. It started in 1994 as an online bookstore. Over time, the company expanded into selling many more products on its e-commerce platform. Amazon leveraged the massive scale of its data centers to offer cloud services to customers with the launch of Amazon Web Services (AWS) in 2006. And it moved into the physical world in 2017 with the acquisition of brick-and-mortar grocer Whole Foods. (Because nothing says “I’m a serious business” like buying a grocery store to sell organic kale to people who already have a garden.)

A $10,000 investment in Amazon at its initial public offering (IPO) in 1995 would be worth close to $22.8 million today. The stock has delivered a jaw-dropping return of roughly 2,276x since its IPO, making Amazon one of the greatest growth stocks in stock market history. (But let’s be honest, if you had that kind of money in 1995, you’d be buying a yacht, not a stock.)

That growth isn’t limited to Amazon’s early years, though. Over the past decade, the stock has soared almost ninefold. Amazon’s market cap of nearly $2.4 trillion ranks it among the world’s five largest companies. Its phenomenal growth also earned Amazon a spot in the so-called “Magnificent Seven” stocks. (Because nothing says “I’m a big shot” like being part of a group that’s basically a boy band for corporations.)

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What about Amazon’s future?

I didn’t pick Amazon as the ultimate growth stock to buy solely because of its past track record, though. I think the company is well-positioned to deliver strong growth in the future, too. (If by “strong growth” you mean “continuing to be the only company that can explain why your Alexa keeps ordering socks.)

Although Amazon is the 800-pound gorilla of e-commerce, it still has significant growth opportunities in this arena. Importantly, the company only claims around 1% of the global retail market. Most shopping is still done in physical stores. As e-commerce gains ground (which I expect will happen), Amazon should benefit. (Because nothing says “I’m a visionary” like betting on the future of shopping, which is basically just a fancy way of saying “I’m a gambler.”)

Earnings growth is arguably the best predictor of share price growth. Amazon’s e-commerce earnings continue to soar, thanks in large part to operational efficiency improvements resulting from artificial intelligence (AI) and robotics initiatives. (Because nothing says “I’m a tech pioneer” like using robots to pick your groceries and then charging you extra for the privilege.)

Speaking of AI, it’s probably the single biggest growth driver for Amazon over the next decade. AWS is poised for strong growth as organizations build and deploy AI systems in the cloud. The company’s cloud services unit has launched multiple AI products that make creating AI models easier, notably including Amazon Bedrock. CEO Andy Jassy predicts that global IT spending in the cloud will more than quintuple over the next 10 to 15 years, with AWS set to be one of the biggest winners. (Because nothing says “I’m a leader” like predicting that the future will be more expensive than the present.)

Amazon continually looked for new markets to conquer during its early years. That hasn’t changed. The company plans to roll out a satellite internet service this year to compete with Elon Musk’s Starlink. Amazon’s Zoox unit is a contender along with Alphabet’s (GOOG) (GOOGL) Waymo and Tesla (TSLA) in what’s expected to be a fast-growing robotaxi market. (Because nothing says “I’m innovative” like trying to outdo a guy who’s literally launching rockets into space.)

Playing offense and defense

Other stocks also have great growth prospects. I especially like Amazon, though, because – to use a football analogy – it plays offense and defense very well. (If “defense” means “hiding the fact that we’re losing money on 90% of our ventures.”)

By offense, I’m referring to Amazon’s growth strategy. As we’ve already seen, the company has multiple ways to grow. If Amazon were a football team, it would have a great defense, too. The company’s “defense” consists of its competitive moats. As the largest player in e-commerce and cloud services, Amazon has plenty of moats. (Because nothing says “I’m secure” like having a moat filled with stock analysts who can’t tell the difference between a trend and a fad.)

There’s no guarantee that any stock will deliver solid gains over the long run. However, I think the odds are better with Amazon than they are with other stocks. (Because if you’re going to bet on a company, might as well bet on the one that’s already made you rich if you had the foresight to invest in 1995. Which you didn’t. But hey, maybe this time will be different.)

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2025-09-04 12:07