Amazon, the e-commerce giant, reportedly controlled a staggering 40% of the U.S. e-commerce market last year. This significant market share places the company in a strong position as the U.S. e-commerce sector is projected to maintain a robust annual growth rate of 15% through the end of the decade. By 2030, this growth could lead to over $19 trillion in annual revenue.

However, recent market fluctuations present a unique opportunity for savvy investors looking to capitalize on a solid technology company at an attractive valuation. Amazon stands out not only as a leader in the e-commerce space but also as a key player in the vast cloud computing market, which is set to expand even further, spurred by advancements in artificial intelligence (AI).

Over the past five years, Amazon's stock has lagged behind competitors such as Nvidia and the Nasdaq Composite Index, with the company's stock gaining a mere 45% during this timeframe. Furthermore, Amazon's stock has seen a decline of approximately 20% in 2025 alone, largely due to broader market weaknesses stemming from tariff-induced uncertainties.

Currently, Amazon.com (NASDAQ: AMZN) ranks as the fourth-largest company globally, with a market capitalization of approximately $1.9 trillion. In comparison, Nvidia holds the third spot with a notable market cap of $2.5 trillion, making it 30% larger than Amazon. As the tech landscape continues to evolve, there exists potential for Amazon to outpace Nvidia in the long run, attributable to its diverse presence across various multibillion-dollar markets.

Nvidia has experienced remarkable success, delivering an astonishing 1,300% gain for its investors over the past five years, significantly surpassing the tech-heavy Nasdaq Composite's gains of around 100%. This growth is largely fueled by the surging demand for Nvidia's graphics processing units (GPUs), which are integral to various applications, from AI servers to automotive technologies and personal computers to sophisticated digital twins.

Shifting our focus back to Amazon, the company is making substantial strides in international e-commerce markets. Notably, Germany stands out as the largest e-commerce market in Europe, where Amazon has reportedly captured an impressive 50% market share. Additionally, Amazon holds the title of the largest e-commerce entity in the U.K., which ranks as the second-largest e-commerce market in Europe and third-largest globally.

Looking ahead, the European e-commerce market is anticipated to triple from 2024 to 2030, potentially generating over $10 trillion in annual revenue within five years. Given this projection, Amazon's e-commerce segment is poised for significant growth, which is expected to mirror trends in the cloud computing sector.

In the realm of cloud computing, Amazon maintains a commanding 30% share of the cloud infrastructure market, placing it well ahead of its nearest competitor, Microsoft, which holds a 21% share. According to Goldman Sachs, the cloud infrastructure market is projected to generate annual revenue of $2 trillion by 2030. AI is anticipated to play a critical role in driving growth in this sector, with generative AI expected to account for 10% to 15% of global cloud spending by that year.

This expansive market opportunity could serve as a catalyst for Amazon's growth trajectory. The companys Amazon Web Services (AWS) segment closed 2024 with nearly $108 billion in revenue, reflecting a 19% increase from the previous year. Given the vast potential size of the global cloud infrastructure market and Amazon's substantial share, there is optimism that this segment will experience remarkable growth in the long term.

Moreover, Amazon is actively working to reduce the costs associated with running AI applications on AWS by developing in-house custom processors. These processors claim to deliver a 30% to 40% price-to-performance advantage compared to traditional cloud instances powered by graphics cards. Many enterprises are beginning to utilize Amazon's cloud instances that leverage these custom AI processors to manage their AI workloads effectively.

Looking to the future, Amazon's accelerating earnings growth is projected to lead to an increase in its stock price. The company plans to invest heavily in capital expenditures (capex) this year, with a 20% increase in capex for 2025, aiming for a total of $100 billion. Although this substantial spending may initially impact Amazons earnings growth for this year, analysts anticipate an increase of 14% in earnings per share (EPS) in 2025, reaching $6.32.

Forecasts for the subsequent years indicate a potential acceleration in Amazon's earnings growth, with estimates suggesting a 19% increase next year, followed by a more robust 25% growth in 2027. If Amazon maintains even a 20% annual earnings growth rate in the three years following 2027, its EPS could rise to $16.22 by 2030. Should the stock trade at 28 times earnings, consistent with current levels of the tech-heavy Nasdaq-100 index, its stock price could soar to $454.

This potential increase would represent a 1.6 times growth from Amazon's stock price as of the market close on April 16, potentially elevating the companys market capitalization closer to $4.75 trillion. Such a significant leap could position Amazon to surpass Nvidia's market cap within the next five years, especially if Nvidia encounters challenges stemming from a downturn in AI hardware spending or heightened competition.

Currently, Amazon's stock trades at 28 times forward earnings, presenting a compelling opportunity for investors looking to capitalize on this Magnificent Seven stock. Experts predict that Amazon has the potential to outstrip Nvidia's market capitalization within the next five years.

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John Mackey, the former CEO of Whole Foods Market, an Amazon subsidiary, serves on The Motley Fool's board of directors. Additionally, Harsh Chauhan does not hold any positions in the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Goldman Sachs Group, Microsoft, and Nvidia, and it recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. For more information, The Motley Fool maintains a disclosure policy.