By benefiting from numerous secular trends, this dominant internet company can keep the growth going.
Management plans to continue spending a massive sum on AI-related capital expenditures.
Earnings are set to keep rising at a double-digit annual pace in the years ahead.
At the end of the day, one of the primary objectives for certain investors is to own businesses that can generate robust long-term returns. A smart strategy to achieve this goal is to find companies that are able to grow their revenue and earnings at rapid rates. Letting these positions run can lead to favorable outcomes.
Using this mental framework, it can seem like there are many growth stocks to choose from. This can make it a daunting task to identify just one to put $1,000 in.
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But luckily, investors can find a dominant business that fits the bill without looking too hard.
Image source: Amazon.
The ultimate growth stock that investors should consider buying with $1,000 is none other than Amazon (NASDAQ: AMZN). It carries a monster market cap of $2.5 trillion (as of Dec. 3). And it collected a whopping $691 billion in revenue over the trailing-12-month period. With this kind of scale, you might think the company's growth days are over. However, that's a flawed view to have.
Amazon stands out because it benefits from multiple tailwinds. Some companies are lucky to have one secular trend pushing them forward. Amazon has many that investors should become familiar with.
The first, of course, is online shopping. Amazon is the king of e-commerce, with about 40% market share in the U.S. Shoppers can find almost anything they want on the online marketplace. With 16% of the domestic retail sector represented by online shopping today, there is still a long runway for Amazon to capture in this industry.
And it has a sprawling logistics network that enables fast and free shipping. This makes it extremely difficult for competitors to succeed.
Another secular trend helping Amazon is streaming entertainment. The business has one of the most popular streaming services in Prime Video. And it has rights to key sporting events, which drives viewer engagement and keeps consumers in Amazon's ecosystem.
That relates to the next tailwind, which is digital advertising. With 2.8 billion visitors on Amazon.com in October, coupled with the attention that Prime Video gets, Amazon is in an enviable position. Digital ad sales jumped 22% year over year in Q3 to $17.7 billion.
Investors can't forget about Amazon Web Services (AWS), the dominant cloud platform that is gaining financially from more IT spending shifting off premises. AWS has leading market share. And it's a major growth and profit engine for the overall business, with revenue rising 20% and the segment's operating margin coming in at 35% in the third quarter.
Amazon is also positioned as a leader in artificial intelligence (AI). The company leverages this technology in various ways. For example, Bedrock allows AWS customers to use AI tools to build their own applications. And Rufus is a shopping chatbot that helps consumers in their commerce journeys.
Amazon plans to spend $125 billion on capital expenditures in 2025, much of it to expand AI-related infrastructure. "You're going to see us continue to be very aggressive in investing in capacity because we see the demand," CEO Andy Jassy said on the Q3 2025 earnings call.
Amazon has been a fantastic stock for investors to have owned over the years. In the past decade, its share price has skyrocketed 587%, well ahead of the market's performance. But can this tech stock continue to beat the market from here on out?
I believe that Amazon can. Strong fundamental gains will definitely be a factor. The consensus view from Wall Street analysts is that the company's revenue and earnings per share will increase at compound annual rates of 11.1% and 16.4%, respectively, between 2025 and 2027.
What's more, Amazon's current valuation isn't expensive. That bodes well for long-term investors who spend $1,000 to accumulate shares.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.