Amazon (AMZN) Stock Costs $250 a Share. Here's Why I'd Still Buy It.

Just about everyone knows of Amazon (NASDAQ: AMZN). Per the 2026 Kantar BrandZ Global Top 100 ranking, Amazon was ranked fourth, with a brand value of $1 trillion. (The company's recent market cap was $2.7 trillion.)

It has been quite good to shareholders, averaging annual gains of 22% over the past 15 years. If you bought in at the stock's IPO back in 1997, you'd be up about 283,000%, enough to turn a $10,000 investment into $28 million! Right now, though, one share costs about $250. That might seem steep, but I'd still buy Amazon -- if I didn't already own it. Here's why.

Image source: The Motley Fool.

The key reason for me is that its stock actually seems appealingly valued at recent levels, despite its torrid long-term growth. Its forward-looking price-to-earnings (P/E) ratio was recently 24, for example, well below its five-year average of 39. (Its price-to-sales ratio of 3.6 was a bit above the five-year average of 3, though.)

Here's an important point, too: A stock's absolute value doesn't mean much by itself. There may be two stocks priced at $250 per stub, and they can be wildly different. One may be tied to a company with a market cap of $100 billion, and the other to a $200 million company. One company may be growing briskly, and the other struggling in the face of multiple challenges. One might be generating loads of cash, while the other is mired in debt that it's having trouble paying down.

That's why you need to compare the price to things like earnings, sales, and so on, and to research any portfolio candidate in depth. Research Amazon and you'll see that it encompasses many businesses, including the fast-growing Amazon Web Services (AWS).

Note, too, that if you don't have $250 to invest, a good brokerage may permit you to buy fractional shares of stock.

Selena Maranjian has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.