Many games doesn't have "BUY AS GIFT" on Xbox Store.

You can buy anything in xbox store or Microsoft online store. Games, movies, apps, DLCs and many other things. Be aware, gift cards, once redeemed, expire in 3 months. And things must be bought with your account. Another thing. You can use money from gift
cards to buy someone a gift.

You're welcome! Depending on what your child would like to use the account balance for, you might be able buy that item as a gift (please note that this doesn't work for everything like microtransactions for example, but it works for most games and add-ons).
For this you simply have to select the 'Buy as a gift' button near the 'Buy' button in the Xbox Store.

You have to purchase a game to make a gift out of it. In the xbox store you have the option to buy for yourself or purchase as a gift.

Hi RickArnold1,

You cannot use a gift card to buy another gift card. Such as Xbox. As it don't work that way. You have to either have physical money (like a credit card) to buy things on the Xbox store or buy an Xbox gift card in the stores.

Again, you cannot do it with a gift card

The rewards states "Get an Xbox Gift Card to buy games, devices, and more at Microsoft Store online, on Windows, and on Xbox." And doesn't state any caveats.

Also 10 months ago I purchase an xbox elite controller 2 and used reward gift card to do it without issue.