7 Reasons to Buy Amazon Stock Right Now

Amazon (NASDAQ: AMZN) impressed investors with its first-quarter results, which it released last week. There was an abundance of positive updates, both in terms of its performance in the quarter and how it's positioned for future growth.

Here are seven reasons it looks like a buy right now.

1. Triple-digit growth in AI

Amazon is already the biggest company in the world by sales, but artificial intelligence (AI) is giving it a major boost. The company is planning to invest $200 billion in capital expenditures (capex) in 2026, and the results are showing up, with AI revenue increasing by triple digits. "We have never seen a technology grow as rapidly as AI," CEO Andy Jassy said on the first-quarter earnings call.

Image source: Amazon.

Some of Amazon's AI services include SageMaker, which Jassy says improves inference time by 40%, and the Bedrock platform, where clients can engage with a variety of large language models (LLMs) to develop generative AI apps. Bedrock spend increased 170% consecutively in the first quarter.

Amazon also offers several turnkey solutions for smaller businesses, including Kiro, which translates natural language into code, Connect, which helps clients set up virtual customer service centers, and Quick, which collates data, improves workflows, and offers insights to help management make informed decisions.

2. Triple-digit growth in chips business

Part of Amazon's AI development has been producing its own budget-friendly chips. While it has a strong relationship with Nvidia, it offers its cheaper chips for smaller clients that need more cost-effective solutions. This business is also growing by triple digits, and revenue increased 40% quarter over quarter.

Jassy pointed out that its growth is masked because it's a self-owned company. The run rate is $20 billion, but as a separate company, it would be $50 billion, and it's probably one of the three top data center chip companies in the world.

3. Accelerating growth in AWS

Since the AI engagement happens on the Amazon Web Services (AWS) cloud platform, AWS sales growth has been accelerating. Sales increased 28% over last year in the first quarter, the highest increase in 15 quarters. What makes that stand out is that it's on a much higher base -- 15 quarters ago, quarterly sales were $20.5 billion, and now, they're $37.6 billion.

Jassy noted a correlation between customers who spend on AI and customers who spend on core cloud services, and as AI continues to be a major growth driver, it's also driving overall cloud growth.

4. Double-digit growth in e-commerce

While AI takes center stage, Amazon isn't letting up in e-commerce. It's constantly making new deals and improving technology, and e-commerce sales are in the double digits despite also having a huge base. Online store sales increased 12% over last year in the first quarter, while third-party sales were up 14%.

Some highlights are 600 new "notable" brands that were added to the marketplace in the first quarter, and 40-fold year-over-year growth in the perishables business, making Amazon the second-largest grocer in the U.S. The growing perishables business is driving a positive cycle, where customers who order perishables spend 80% more than customers who don't.

5. Faster delivery speeds

Amazon is boosting e-commerce engagement and sales by speeding up delivery times. It recently announced one- and three-hour delivery options on more than 90,000 items, with three-hour delivery available in more than 2,000 cities and one-hour delivery available in hundreds of cities. It offers the Amazon Now service, which gets items to customers in as little as 30 minutes, in nine countries and growing.

6. Strong ad sales

Advertising is also still a high-growth, high-opportunity business. Sales increased 24% over last year in the first quarter, and Amazon is using the power of AI to help advertisers create compelling, low-cost campaigns with pinpointed accuracy for high conversions.

It's no longer an Amazon-only business; it services many clients, including streaming clients, through its competitive ad platform. For example, Netflix advertisers can use Amazon's exclusive shopper data to tailor ads on Netflix's ad-supported network.

7. Progress in Amazon Leo

Finally, it's making progress in Amazon Leo, formerly Project Kuiper, its satellite broadband business. It's set to launch in the coming months, and it has commitments from Delta Air Lines, JetBlue, NASA, and more. It's also acquiring GlobalStar, which will provide it with direct-to-consumer internet services, and it has a deal with Apple to supply satellite services for Apple watches and iPhones.

These are seven reasons Amazon has tons of potential, but there are many others, and investors can still get in as Amazon approaches a $3 trillion valuation.

Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Amazon, Apple, Netflix, and Nvidia. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.