<div id="readability-page-1"><p><strong>Amazon</strong> <span>(AMZN<span> -0.00%</span>)</span> has been a tremendous stock for long-term investors, including its 55% gains over the past three years. But that's only slightly outpaced the <strong>S&amp;P 500</strong> over that time, leaving some investors wondering if Amazon stock has permanently lost its luster.</p> <p>I think that sentiment fails to account for Amazon's strong position in some very big markets and how hard it will be for competitors to catch up. To that end, here are three reasons why it's still a smart move to buy Amazon stock right now.</p> <div><p><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjkyNzcvZ2V0dHktZGVsaXZlcnktZmVkZXgtdXBzLWFtYXpvbi0xMjAweDc5OC0zNmI3YTJlLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="465" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjkyNzcvZ2V0dHktZGVsaXZlcnktZmVkZXgtdXBzLWFtYXpvbi0xMjAweDc5OC0zNmI3YTJlLmpwZyZ3PTcwMA"/></p><p>Image source: Getty Images.</p> </div> <h2>1. It has the third-largest digital ad business in the U.S.</h2> <p>Amazon is an advertising powerhouse as the No. 3 ad platform, after <strong>Alphabet</strong> and <strong>Meta Platforms</strong>. While those are certainly big shoes to fill, Amazon has made impressive gains over the past several years. Consider that Amazon had less than 11% of the U.S. digital market in 2021 and will have an estimated 17% by next year. That's beginning to nip at the heels of Meta's 21% market share.</p> <p>Advertising is also Amazon's fastest-growing business, with ad sales rising 23% in the second quarter to $15.7 billion. Unlike its rivals, Amazon's ad sales have a built-in advantage for the company, as advertisers spend money to sell goods on Amazon's platform, allowing the company to benefit from both the ad sales and the online purchases. And with the U.S. digital advertising market expected to grow into an estimated $220 billion market by 2030, there's still room for Amazon to benefit.</p> <h2>2. It's tapping into a $2 trillion AI opportunity</h2> <p>Some people have been disappointed with Amazon's cloud revenue growth lately, but I think they miss the fact that Amazon has the largest cloud computing market share, with 30% compared to <strong>Microsoft</strong>'s 21% and Google's 12%.</p> <div><p>Microsoft is certainly making lots of ground and shouldn't be ignored. However, the AI cloud computing market will be worth an estimated $2 trillion by 2030, so there's plenty of room for both companies to benefit. </p><p>What's more, Amazon is still investing in its cloud computing business and will increase its capital expenditure spending to $118 billion this year, mostly to expand its AI infrastructure.</p></div>  <h2>3. It still dominates in e-commerce</h2> <p>Amazon has about 38% of the U.S. e-commerce market share. It's such a huge lead that some of the largest retailers barely register. <strong>Walmart</strong>'s platform takes just 6% of the market, and <strong>Target</strong> has spent years improving its online offerings and still has only 2% of the U.S. e-commerce market.</p> <p>Amazon not only has the first-mover advantage in this space but has also built an impressive bulwark against its competitors, boasting more than 200 million Prime members who choose to give Amazon money for access to faster shipping and perks like video streaming. Prime has been massively successful for the company, and the latest proof of that comes from its recent Prime Day event, which offered deals to new and existing Prime members and generated an estimated <em>$</em>24 billion in sales in just <em>four days</em>.</p> <h2>Keep this in mind when buying from Amazon</h2> <p>Amazon is the leading cloud computing company, its advertising business continues to grow, and its e-commerce prowess is unmatched. With all these foundations in place, the company is well-positioned to benefit as these markets grow.</p> <p>Amazon's shares are also priced relatively well right now, with a price-to- earnings (P/E) ratio of about 34, compared to the S&amp;P 500's average of about 29 and internet software companies' average of about 52. Given that the company spans so many lucrative markets and is relatively cheaper than some internet companies, the stock still looks like a relatively good deal right now.</p>                                                                            </div>

AMZN

AMZU

<p>Amazon (AMZN) remains a strong investment despite recent doubts, with a 55% gain over three years. Key reasons to buy include its position as the third-largest digital ad platform in the U.S., capturing 17% of the market, and significant growth in ad sales. Additionally, Amazon leads in cloud computing with a 30% market share and is investing heavily in AI. It also dominates e-commerce with 38% market share, supported by over 200 million Prime members. With a P/E ratio of 34, Amazon's stock is relatively attractive compared to peers.</p>

- Amazon has shown significant growth, with a 55% increase in stock value over the past three years, slightly surpassing the S&P 500.  
- The company holds a strong position in digital advertising, cloud computing, and e-commerce, with substantial market shares and growth potential in these sectors.  
- With a favorable price-to-earnings ratio and continued investments in key areas, Amazon remains an attractive investment opportunity.  

3 Reasons to Buy Amazon Stock Like There's No Tomorrow