3 Life-Changing Stocks to Buy Today

Anyone who regularly saves and invests their money in the stock market can build wealth. Time in the market is more important than how much money you have to start. But dollar-cost averaging into a well-chosen portfolio of growth stocks can increase in value significantly over a few decades.

To give you some ideas to get started, three Motley Fool contributors recently selected three competitively positioned companies to invest in today. Here's why they like Amazon (NASDAQ: AMZN), MercadoLibre (NASDAQ: MELI), and Axon Enterprise (NASDAQ: AXON).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

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AI is the future, and Amazon is ready

Jennifer Saibil (Amazon): Amazon has changed many lives in many ways, from providing essential e-commerce services that have reimagined shopping habits to creating incredible shareholder wealth for early investors. That kind of growth isn't likely to happen again, but there's so much more opportunity for Amazon, and smart investors can still buy shares today to see their investments thrive.

Amazon is the top name in two different industries, an incredible feat for a company that started out as an online bookseller. It has the lead in U.S. e-commerce by a wide margin, with no chance of any competitor taking over in the foreseeable future. Plus, it's continually upgrading its platform to keep it that way. Deliveries are getting faster; it's adding new products and brands to the marketplace, including luxury brands Michael Kors and Laura Mercier in the first quarter, and it's using technology like robotics and artificial intelligence (AI) to enhance its systems.

Speaking of AI, Amazon is pioneering many of the most potent generative AI programs, primarily through the Amazon Web Services (AWS) cloud computing segment. The second growth business where it has a lead is cloud computing, and this segment continues to grow at robust rates. AWS sales increased 17% year over year in the first quarter, and this high-margin business is also padding the bottom line, accounting for 63% of the total company operating income.

CEO Andy Jassy is always talking about how massive the AI opportunity is, and it's already generating billions of dollars in sales for Amazon. He says that 85% of information technology spending is still on the premises, but he sees it as a given that it will flip in the next decade or two. "Before this generation of AI, we thought AWS had the chance to ultimately be a multi-hundred-billion-dollar revenue run rate business," Jassy said on the first-quarter earnings call. "We now think it could be even larger."

Amazon stock is trading at a discount to its average P/E ratio over almost any time period at 35 times trailing-12-month sales, and now is a great time to buy.

A proven e-commerce winner

Jeremy Bowman (MercadoLibre): MercadoLibre has already been a life-changing stock for early investors. The Latin American e-commerce leader has gained more than 8,000% since its IPO, turning a $1,000 investment into more than $80,000. However, the stock could still climb further from here as its market cap is currently $121 billion.

The company, which operates primarily as an e-commerce marketplace and as a fintech platform, still has a number of attractive growth opportunities over the coming years.

First, the level of penetration of e-commerce in Latin America is below what it is in the U.S., and as tech and logistics infrastructure improve across the region, online shopping should continue to grow. Physical stores still account for 85% of retail spend in Latin America. The same is true of digital payments and other fintech services under its MercadoPago umbrella. The company has also captured business from brick-and-mortar retailers as it provides point-of-sale machines in addition to online payments.

Additionally, MercadoLibre is finding new businesses to tap into as it's growing the MercadoCredito lending business and expanding its online ad program, following a similar path to Amazon, which has seen considerable success.

The company's execution and growth also remain strong as revenue rose 37% in its first quarter to $5.9 billion, and it reported an operating margin of 12.9%.

Over the long term, MercadoLibre's margins should continue to expand as it gains scale and grows higher-margin businesses like advertising, payments, and its e-commerce marketplace.

This monster growth stock keeps winning

John Ballard (Axon Enterprise): Axon stock has been off to the races, rising 712% over the last five years and up 30% year to date. With a market cap of $60 billion and trading at high multiples of sales and earnings, the stock looks expensive. However, Axon also continues to report robust growth that points to a monster opportunity in improving public safety.

Axon is known for its TASER stun devices, which remain in high demand after more than two decades. TASER revenue grew 19% year over year in the first quarter, and the TASER 10 is significantly outpacing sales of previous models.

But Axon is more than just products. It offers a growing portfolio of software and services, including a cloud-based platform that helps officers store and manage evidence. Revenue from software and services grew 39% year over year last quarter, making up 43% of Axon's total revenue.

The growth in services is accomplishing two important things for Axon's business. Its software offerings are widening its competitive moat and improving margins. Revenue from services generates a high 74% gross margin, compared to 50% from sales of devices. This is fueling robust growth in earnings, which are expected to grow 21% over the next several years.

Axon is offering a complete platform with products and software for law enforcement to do their work more efficiently and smarter. The stock may have to settle in the near term, given the high valuation, but the company's addressable market is expanding with its push into cloud-based services, which should make the company a lot more valuable in another 20 years than it is today.

Should you invest $1,000 in Amazon right now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jennifer Saibil has positions in MercadoLibre. Jeremy Bowman has positions in Amazon, Axon Enterprise, and MercadoLibre. John Ballard has positions in MercadoLibre. The Motley Fool has positions in and recommends Amazon, Axon Enterprise, and MercadoLibre. The Motley Fool has a disclosure policy.