1 Reason to Buy Amazon (AMZN) Stock

Key Points

• Amazon is known for being the leader in online shopping, but it has numerous growth drivers.

• The sprawling business has its hands in digital advertising, healthcare, and autonomous driving.

• Its most exciting segment is perhaps cloud computing, which boasts strong profitability.

• 10 stocks we like better than Amazon ›

Amazon (NASDAQ: AMZN) is one of the greatest success stories in the history of the American economy. The disruptive company, which started out as an online seller of books in the 1990s, has now transformed into a technology juggernaut that seemingly has its hands in many different industries. And shareholders have been rewarded, with a monster 10,150% stock gain just in the past two decades.

Even with the business sporting a market cap of $2.4 trillion and raking in $168 billion in second-quarter revenue, investors might still consider owning the stock. Here's one reason to buy Amazon.

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Image source: Amazon.

Growth from multiple segments

Amazon stands out because of its historical growth. Net sales soared 617% between 2014 and 2024. Looking ahead, the gains should be broad-based. The fact that the business has multiple growth engines propelling it forward is one top reason investors should add Amazon to their portfolio.

Obviously, there's e-commerce, a subsector that only commands 16.3% of all retail spending in the U.S. But the company also makes money from digital advertising, a segment that saw sales jump 23% year over year in Q2. Amazon is also involved in healthcare and autonomous driving.

Don't forget about Amazon Web Services

There's also the cloud computing division Amazon Web Services (AWS), the most exciting part of the company. AWS is growing at a slower pace than its smaller rivals, but this isn't necessarily cause for immediate concern. Those peers are expanding off a smaller revenue base. What's more, AWS still has the lead in terms of market share, and it remains extremely profitable, with an operating margin of 32.9% in the second quarter.

As we look to the next five or 10 years, AWS will surely become a more important contributor to Amazon's financial success. Add this to Amazon's other growing segments, and investors should think about buying this stock today.

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

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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.