The S&P 500(SNPINDEX: ^GSPC) confirmed its presence in a bull market last year and has been roaring higher ever since. The index finished the year with a gain of 23% and has climbed more than 3% so far in 2025. Investors have piled into growth stocks that may benefit from a strengthening economy, favoring companies in game-changing technologies like artificial intelligence (AI) and quantum computing.
And this movement continues as these technologies are in the early days of their growth stories. Today's $200 billion AI market may top $1 trillion, while quantum computing should soar from about $1 billion to more than $5 billion by the end of the decade, according to Markets and Markets data.
One of the stocks benefiting from this momentum is a leader in two growth markets -- e-commerce and cloud computing -- and this player also is set to win in the areas of AI and quantum computing as it offers platforms to its cloud customers. I'm talking about Amazon(NASDAQ: AMZN), a tech giant that's built a solid earnings track record over time. Let's check out three reasons to buy this top stock like there's no tomorrow.
Image source: Getty Images.
1. Cost structure efforts are bearing fruit.
A couple of years ago, rising inflation weighed heavily on Amazon -- hurting the company's costs and limiting its customers' buying power. But Amazon acted wisely, using that moment as the opportunity to revamp its cost structure. This involved cutting jobs, working to make the fulfillment network as efficient as possible, and other moves.
All this helped the company shift from its first annual loss in a decade to a profit just a year later -- in 2023. And today, Amazon's earnings continue to climb as its cost-structure work bears fruit.
One decision in particular is a major one that could continue to offer Amazon savings. This is the shift to a regional fulfillment model in the U.S. from a national one -- the idea is that inventory now is kept closer to the customer. This has helped reduce Amazon's cost to serve, and by doing this, the company can continue to offer the lowest prices to keep customers coming back.
And Amazon said in its latest earnings call that it's making moves that "will have meaningful long-term impact" on cost to serve -- so more savings could be just ahead.
2. The AI investment already is boosting revenue
Amazon has gone all-in on AI, both in its e-commerce and cloud businesses. In e-commerce, it's using tools to help gain in efficiency -- for example, designing the fastest delivery routes -- or helping customers and sellers on its platform. And in Amazon Web Services (AWS), the cloud business, the company has seen its efforts already lead to revenue growth.
From the start, AWS pledged to become a force in every layer of AI, from the selling of a wide variety of AI chips to customers building a platform from scratch to offering a fully managed service that allows customers to tailor existing large language models to their needs. And AWS also is present in the area of AI apps, for example offering the Amazon Q assistant for software developers. All this has helped AWS reach an annual revenue run rate of $110 billion.
So AI already is proving to be a high-growth business for Amazon.
3. Agentic AI and quantum computing could lead to a new wave of growth
And this brings me to my next point: AI growth may be far from over. AI's initial phase involved the building out of infrastructure -- that's still going on, and AWS should continue to benefit. At the same time, a new stage of growth is beginning, involving using AI in the real world, often through AI agents.
These agents are software designed to study complex problems, reason, find a solution, and apply it. Amazon has launched Project Amelia, an AI assistant to help sellers on its platform, as one of its initial moves in this area. And AWS offers customers a platform to build their own AI agents, suited to their needs.
As for quantum computing, AWS provides customers with a variety of services, allowing them to strengthen their research and even access hardware from specialists like Rigetti Computing.
AWS already is the world's biggest cloud services provider -- so the audience for its services is there, ready, and waiting for each new launch or innovation. And as these companies pour more investment into using AI and exploring quantum computing, they're likely to go to AWS, and this movement could supercharge Amazon's revenue growth and the stock price in the quarters to come.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $902,242!*
Now, it’s worth notingStock Advisor’s total average return is947% — a market-crushing outperformance compared to178%for the S&P 500. Don’t miss out on the latest top 10 list.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
