If I Could Only Buy 1 Growth Stock in July, It Would Be Amazon By a Mile
Key Points
Amazon's Prime Day helped lift U.S. online retail sales by 9.3% over last year.
AI is a growth catalyst for AWS and a game changer for e-commerce profit margins.
It's tough finding world-class companies at attractive prices, but Amazon checks the box.
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Amazon (NASDAQ: AMZN) stock has bounced off its 52-week low but remains a ways off from its all-time high of $278 a share. The company has had quite a turbulent past couple of years. The e-commerce giant has navigated tariff drama and fluctuating consumer sentiment. Meanwhile, artificial intelligence (AI) is boosting Amazon's cloud business, but those tailwinds have come with soaring capital expenditures.
Despite these bumps in the road, e-commerce and AI remain central growth engines for Amazon. Here's why Amazon is probably the best growth stock you can buy in July.
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Image source: The Motley Fool.
Amazon turns in a solid Prime Day
Most people who shop on Amazon know about Prime Day, the company's annual flagship summer retail event. Prime Day is important for Amazon's e-commerce business and a litmus test for consumer spending across the economy.
According to data from Adobe, U.S. e-commerce spending clocked in at $26.4 billion during the Prime Day event, from June 23 to June 26. That's a 9.3% increase versus a year ago, and puts the Prime Day event on a similar footing with Thanksgiving, Black Friday, and Cyber Monday. Americans spent $32.45 billion online across those holidays in 2025.
The strong online spending data signals a successful Prime Day for Amazon, which needs healthy e-commerce volume to drive efficiency in its supply chain. Additionally, consumers need an Amazon Prime membership to participate in Prime Day sales, which is another strong indicator of Amazon's lucrative Prime membership ecosystem, which has over 180 million members in the United States.
AI upside makes Amazon a compelling buy now
Amazon is in a somewhat unique position to capitalize on AI. Of course, there's AWS, Amazon's cloud computing ecosystem. The company's close ties with Anthropic are helping drive continued cloud growth, which clocked in at 28% in the first quarter, putting quarterly revenue at $37.6 billion. Amazon's entrenched cloud relationships with enterprise customers make cross-selling agentic AI and other AI technology a no-brainer.
Additionally, AI could revolutionize e-commerce, which has historically relied on human workers to pick and pack orders and deliver packages to consumers. Humanoid robots and other physical AI innovations could replace hundreds of thousands of humans, a game changer for Amazon's e-commerce profit margins.
The stock is middling within its 52-week range, but a strong growth outlook makes Amazon stock a table-pounding buy. Wall Street analysts estimate that Amazon will grow its earnings by an average of 17% annually over the next three to five years. That's more than enough growth to justify buying one of the world's most dominant companies at 27 times its 2026 earnings estimates.
There might be cheaper stocks out there, but Amazon's combination of quality, future potential, and valuation is difficult to top right now.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Amazon. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
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