Amazon (AMZN 1.35%) shares have been a home run investment for long-term investors. A $1,000 investment in the stock 20 years ago would be worth $112,000 today.

But even though Amazon has grown into a dominant tech giant with a $2 trillion market cap, it is still delivering the level of growth that can build wealth for investors, as noted by its 90% increase in earnings last year, and analysts project the company's earnings to continue growing at double-digit rates for the foreseeable future.

Its long-term potential in cloud computing services, artificial intelligence (AI), and other services make it one of the best growth stocks you can buy with $1,000 right now.

Amazon's AI opportunity

Amazon's lead in the $300 billion cloud computing market is putting it in a great position to benefit from the massive spending on AI. Amazon Web Services (AWS) is seeing its AI revenue grow at triple-digit rates. Overall, AWS is generating more than $100 billion in annual revenue, and at the current pace it's growing it can reach $200 billion within five years.

A growing number of generative AI applications have been built using AWS services. Amazon offers tools for building AI models like Amazon Bedrock, along with its own AI chips like Trainium2 to make it more affordable for customers to build AI applications.

Investments in chips and data centers require substantial capital investment up front, but it should lead to higher profits over time. Amazon's operating profit nearly doubled to $68 billion in 2024, with AWS contributing 58% of that total. This is why the growth of AWS is a major catalyst for the stock.

Why buy Amazon stock

Of course, AWS is just one piece of Amazon's empire. Cloud services and AI are attractive opportunities, but Amazon's total revenue grew 11% last year to $638 billion, with sales from its online store contributing 39% of the total.

Amazon benefits from multiple revenue streams coming from more than 200 million Prime members, AWS, advertising, subscriptions, and fulfillment services for third-party merchants. All these services synergize together. For example, Amazon's AI capabilities are helping the company intelligently manage inventory to speed up deliveries for retail customers. This shows how the investments in AWS and AI are ultimately widening the company's competitive advantage.

Amazon's advertising services hauled in $56 billion of revenue last year, as merchants are eager to get their products in front of millions of visitors on amazon.com every day. Advertising was Amazon's fastest-growing business last year. While Amazon could suffer from lower consumer spending in a recession, its diversified revenue model provides multiple avenues that can fuel growth over the long term.

The opportunities in non-retail services will make Amazon a more profitable business over the long term. Analysts are projecting its earnings per share to grow at an annualized rate of 20%. Management is also working on reducing costs and improving margins in the retail business, which could help the company meet those estimates.

Amazon stock is attractively priced following the recent sell-off. Given the company's growth opportunities, diversified revenue streams, and profitability, this is one of the best growth stocks to anchor anyone's retirement account.