Jennifer Saibil, The Motley Fool

Fri, Jun 20, 2025, 2:52 AM5 min read

• Amazon has an unbeatable share of e-commerce, and the industry is expected to rise at a compound annual rate of 8% in the next few years.

• It's the largest cloud computing company, and it expects the AI business through its Amazon Web Services to skyrocket.

• The stock is trading at an attractive valuation today.

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The stock of Amazon (NASDAQ: AMZN) has delivered life-changing gains for investors who got in early enough. It's up nearly 200,000% over its lifetime and 900% over the past 10 years.

Everyone is talking about what it's doing in artificial intelligence (AI) today and how that could jump-start sales growth. There's a huge long-term opportunity, but can Amazon stock double over the next five years?

With all of the AI hype, let's not forget that Amazon's main business, for now at least, is e-commerce, where sales were $94 billion in the 2025 first quarter, accounting for more than 60% of total revenue.

The company has a hold on U.S. e-commerce, and it's taking many actions to protect that moat and keep its dominant spot. Its Prime members count on that part of the business for their essentials purchases and more. It controls about 40% of the total U.S. e-commerce market, with the next-highest competitor, Walmart, at only around 6%.

CEO Andy Jassy said that although it could be affected by new tariffs, shoppers tend to choose retailers they trust when there's uncertainty. And its huge base of sellers and product assortment mean that shoppers are likely to find the items they need at the price they want on its platform.

As usual, Amazon reported increasing delivery speed in the 2025 first quarter, and it has made a number of changes to its logistics network to keep that up. It changed from a national network to a regional one, it keeps more of its highest-selling products closer to more shoppers, and uses AI throughout its business to determine fast and cheap shipping options.

The company is testing new processes in a pilot distribution center that's cutting 25% of processing time and is on track to deliver 25% cost savings at peak times.

E-commerce overall is expected to have a compound annual growth rate (CAGR) of 8% through 2029, according to Statista, and as the leader in the industry, much of that will land on Amazon's platform.

Beyond e-commerce, the company has launched a hugely successful advertising business that leverages its unmatched e-commerce platform for consumer exposure to ads. It also now offers an ad-supported streaming tier on Prime Video through its ad business, with strong results so far.