Synthetic intelligence (AI) is all the fad at the moment, and traders do not need to miss out. Firms like Nvidia and Palantir Applied sciences have delivered extraordinary positive aspects for traders — 816% and 1,600% over the previous three years, respectively.
Amazon (AMZN -0.57%) hasn’t been as excellent in that timeframe, doubling over three years. That is nonetheless a powerful, market-beating feat. And Amazon is much more than AI, which is why it may possibly continue to grow, well past the AI period. Listed here are 10 causes to purchase it at the moment and maintain it without end — and AI is just one of them.
Picture supply: Amazon.
1. E-commerce is rising
E-commerce continues to develop as a share of retail gross sales, and retail is at all times rising, too. In response to the Unites States Census Bureau, U.S. retail gross sales elevated 3.2% within the first quarter of 2025 over the corresponding interval final yr, nevertheless e-commerce gross sales elevated 5.6%, rising to fifteen.9% of whole retail gross sales.
That is an ongoing sample that advantages Amazon because the main U.S. e-commerce supplier.
2. Amazon’s lead in e-commerce
Amazon’s lead is so vast that for the foreseeable future, it is impenetrable. It accounts for round 40% of all U.S. e-commerce, and that is a self-reinforcing moat; prospects, particularly loyal Prime members, depend on it increasingly more because it provides new merchandise and will get orders to their locations sooner.
Amazon is frequently making progress in these areas. It not too long ago added a number of luxurious manufacturers to {the marketplace}, together with a partnership with Saks Fifth Avenue, and it is redoing its inbound achievement channels to broaden its capabilities to maintain extra stock nearer to extra customers.
3. Cloud companies are rising
Cloud companies are rising even sooner than e-commerce, and it is one other development business the place Amazon dominates by means of Amazon Net Providers (AWS). In response to Grand View Analysis, the cloud business is anticipated to extend at a compound annual development charge (CAGR) of 20.4% by means of 2030.
CEO Andy Jassy says that 85% of firm spend continues to be on the premises, however that is going to flip over the subsequent 10 to twenty years, bringing billions of {dollars} to cloud computing suppliers.
4. Amazon’s lead within the cloud
Amazon’s lead within the cloud enterprise is not as vast as in e-commerce, however it’s nonetheless vital. AWS has 30% of the worldwide market, in contrast with 21% for Microsoft Azure and 21% for Alphabet‘s Google Cloud, based on Statista.
5. Streaming is overtaking Cable and broadcast TV
Streaming has been rising in prominence and recognition for years, and adoption accelerated when the pandemic began. It was solely a matter of time earlier than it grew to become the dominant medium for viewing content material, and that point is right here. In Might, streaming accounted for extra viewing hours than cable and broadcast TV mixed for the primary time with 44.8%, based on Nielsen information.
Amazon is a serious participant in streaming with Prime Video, and it owns each Amazon Studios and MGM Studios. Like the opposite primary streaming companies, it provides a premium tier for Prime members and an ad-supported tier.
6. The sturdy promoting enterprise
The streaming platform is one new space the place Amazon is boosting its promoting enterprise, however it has monetized its market with advertisements from third-party sellers for years. Promoting is often its fastest-growing section, and it elevated 18% yr over yr within the 2025 first quarter. It is a high-margin enterprise with many long-term alternatives.
7. Inroads into healthcare
Amazon acquired One Medical in 2023, and it additionally provides subscription medicine companies by means of Amazon Pharmacy. It would not report this as a separate section, however it’s nonetheless investing in its development, and it is rising the Pharmacy section by increasing its protection of areas the place it may possibly get drugs to extra individuals in in the future.
8. Different new companies
There’s at all times one thing new on Amazon’s radar. Just lately, it is targeted on AI, however it’s additionally engaged on Mission Kuiper, a broadband satellite tv for pc enterprise. It simply launched its first satellite tv for pc, with others coming, and it is planning to begin providing companies to prospects within the again half of the yr.
9. It is massively worthwhile
Amazon is extremely worthwhile, and working revenue elevated 20% yr over yr within the first quarter. Working margin is reaching new highs, hitting 11.8% within the first quarter. That is being pushed by its high-growth, high-margin companies like AWS and promoting.
10. The AI alternative
I saved AI for final to display that Amazon has a lot extra going for it, which is why it has a lot endurance. AI is already a multibillion-dollar enterprise, and Jassy sees AI as a trillion-dollar alternative. He envisions AI as being a typical part of each app that is going to be developed, and he expects a lot of that to occur by means of the AWS platform.
Amazon provides development alternatives in AI and past, and it could possibly be a superb addition to your portfolio.
John Mackey, former CEO of Complete Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. Suzanne Frey, an government at Alphabet, is a member of The Motley Idiot’s board of administrators. Jennifer Saibil has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Alphabet, Amazon, Microsoft, Nvidia, and Palantir Applied sciences. The Motley Idiot recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
