Top Growth Stock to Consider Purchasing with $1,000 Today

Top Growth Stock to Consider Purchasing with ,000 Today

THE Nasdaq Composite hint is in record territory. While this is exciting news for some, it can be discouraging for those who have been on the sidelines.

But don’t let the rising market stop you from looking for attractive investment opportunities. Some quality companies are still selling at attractive valuations.

If you have $1,000 and are ready to invest, don’t look beyond Amazon (NASDAQ:AMZN). Here’s why it’s the ultimate growth stocks buy now.

Significant growth potential

Amazon generated $575 billion in net sales in 2023. That’s more than the GDP of some countries, like Ireland and Thailand. And that puts Amazon behind only Walmart on the Fortune 500 list.

To be clear, this revenue makes Amazon a colossal organization. But investors would be delighted to know that the company still has significant development opportunities, thanks to multiple favorable growth factors.

Amazon’s business was built on the expectation that online shopping would expand. Today, almost 40% of all e-commerce spending in the United States occurs on its website. There is still considerable room for online activity to take over the share of physical purchases, which should boost activity in the years to come.

The popularity of Amazon Prime membership not only contributes to an increase in online sales, but it may also allow Prime Video to attract more TV viewing time. Therefore, Amazon also benefits from the streaming orient yourself.

Then there’s digital advertising, a segment that generated $14.7 billion in revenue in the last three months alone. This total increased 26% year over year. In the United States, Amazon is only behind Alphabet And Metaplatforms in the industry, which most investors may not realize.

Perhaps the most interesting part of the equation is the cloud division, Amazon Web Services (AWS). Although growth has slowed due to unfavorable macroeconomic factors, the industry-leading segment posted an operating margin of 30% in the fourth quarter. And AWS gives Amazon a major way to introduce artificial intelligence innovations to its customers.

Pay the price

It’s not difficult to convince someone that Amazon is a great company. The facts speak for themselves. It’s no wonder stocks have soared 8,300% over the past 20 years.

But even to a market capitalization worth nearly $1.9 trillion today, it remains an interesting investment candidate. Indeed, Amazon shares are currently trading at a price-to-sales multiple of just under 3.3. Even after the stock soared 113% since the start of 2023, its valuation is roughly in line with its 10-year average.

Paying this price for Amazon seems like the right decision. This company has many competitive advantages that give me confidence in its ability to thrive in the long term. It has a size and logistical footprint that its competitors cannot match, especially when it comes to better serving its customers.

And more importantly, Amazon continues to expand its data advantage. Very few companies are able to collect massive amounts of data from their customers like Amazon. And management can continually find ways to gather information that will better direct marketing and product development efforts.

Investors, however, have reason to be even more optimistic. After years of aggressive capital spending, executives are now focused on creating a more efficient organization, reducing costs at every level.

This means that Amazon, which saw its operating profit increase 202% in 2023, could see its profits accelerate. And that can propel the title even further.

Now seems like the right time for potential investors to add Amazon to their portfolios.

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

Before buying stocks on Amazon, consider this:

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Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Neil Patel has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Alphabet, Amazon, Meta Platforms and Walmart. The Motley Fool has a disclosure policy.

The Ultimate Growth Stock to Buy with $1,000 Right Now was originally published by The Motley Fool

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