If you have $1,000 you're looking to invest in just one stock, one of my favorite growth stocks to buy right now is Amazon (AMZN 1.52%). With the stock underperforming the market last year, it now finds itself at an attractive valuation, both on a historical basis and versus peers. Meanwhile, the company is seeing strong operating leverage in its e-commerce operations, and revenue growth at its cloud computing unit, Amazon Web Services (AWS), is starting to accelerate.
NASDAQ: AMZN
Key Data Points
Investing to win
If Amazon's history is any indication, the company invests to win. It did this in its e-commerce business, spending a ton of money to build out the largest logistics and warehouse operations on the planet. It then turned around and created the entire infrastructure-as-a-service (IaaS) cloud business from scratch, eventually building it to become its most profitable segment.
However, Amazon has never rested on its laurels, and it's still investing heavily in its businesses to make them better and grow. Within e-commerce, the company has become the largest manufacturer and operator of robots in the world. It is continually advancing what these robots are capable of doing, making it a leader in the space. Since robots can work 24/7/365, perform some tasks that humans cannot, and don't take a salary, they help save costs and improve efficiency.
Meanwhile, Amazon has also turned to artificial intelligence (AI) to improve its e-commerce operations. Its DeepFleet AI model now helps seamlessly coordinate its robots, assigning tasks and making sure they take the most efficient routes. It's also using AI to improve delivery routes for drivers and to help them find hard-to-locate drop-off points in places like large apartment complexes. In addition, it uses AI to predict where to best store inventory and optimize its complete supply chain.
This is all helping lead to strong operating leverage, as evidenced by the 28% increase in North American adjusted operating income it saw last quarter on just an 11% increase in revenue.
Amazon's biggest investments today, however, are building out its AI data center infrastructure to help support growth at AWS. AWS revenue began to accelerate in Q3, rising 20%, but this could just be the beginning. The company was capacity-constrained in the quarter, and it just started ramping up its huge Project Rainier data center that it built exclusively for Anthropic. The new data center will be completely powered using its custom Trainium chips, and it could be the start of other customers using its chips to save money.
In the meantime, it also signed a seven-year, $38 billion deal to provide compute power to OpenAI using Nvidia graphics processing units (GPUs), and it has been in separate talks about making an investment in the large language model (LLM) maker that would include the company using some of its custom AI chips. Amazon plans to up its capital expenditure (capex) budget in 2026, given the strong demand for AI infrastructure and services it is seeing, which should drive growth at AWS.
Image source: Getty Images.
Time to buy the stock
Another reason to buy Amazon's stock is valuation. The stock currently trades at a forward price-to-earnings (P/E) ratio of below 26 times 2026 analyst consensus earnings estimates. That's one of the lowest valuations in its history. It's also much lower than retail peers, Walmart and Costco, which trade at 38 times and 41 times next year's analyst EPS estimates, respectively, while their retail sales have been growing at a slower pace than Amazon. (Note that Costco is in just fiscal Q1, so its multiple based on the current fiscal year is even higher at 45 times).
AMZN PE Ratio (Forward 1y) data by YCharts
Amazon is seeing strong operating leverage in its e-commerce operation and accelerating growth in its cloud computing business. Combined with an attractive valuation that is well below its retail peers, the stock has strong upside, both in 2026 and beyond. That makes it the growth stock I'd buy with $1,000 right now.
