The Long-Term Trends That Make an Awesome Buy

It might sound counterintuitive to argue that (NASDAQ: AMZN) is, in many ways, just scratching the surface of its long-term opportunity. With a market capitalization over $450 billion, the e-commerce giant is already one of the world's largest companies.

However, when you stand back to appraise the data, it becomes clear that Amazon could still be in its early days. Here's an in-depth examination of the forces that still make Amazon one of the best stocks to own in tech today.

The trends that power Amazon

Amazon's rise over the past two decades is nothing short of incredible. Jeff Bezos founded the company from a garage in Seattle as a start-up that sold books online. In 1996, the year before it conducted its IPO, Amazon generated $15.7 million in sales.Last year, revenue rose to $135.9 billion, and cash flow from operations topped $16.4 billion.

The trends underpinning Amazon's success are twofold. The first should come as no surprise: The continued revolution in retail -- where e-commerce continues to steal market share at the expense of traditional brick and mortar -- is the main wind in Amazon's sails. In fact, Amazon so dominates the new e-commerce world that research from eMarketer claimed Amazon captured 53% of e-commerce sales growth in the U.S. last year. Meanwhile, retail stores are closing their doors at a pace faster than during the depths of the Great Recession, as the entire retail industry scrambles to right-size its retail footprint and cater to today's always-on mobile consumers.

Second, Amazon enjoys a pivotal role in the shift to cloud computing. Its Amazon Web Services cloud-computing platform dominates this highly competitive market, with a roughly 40% share. More impressive still, Amazon's AWS platform sales continue to outpace even the incredible sales growth of its e-commerce arm, eclipsing $10 billion in revenue faster than Amazon in its earlier days.

At the scale Amazon currently operates, one can be forgiven for assuming that the company's growth will soon slow with age. However, Amazon remains a growth stock in the truest sense of the word, thanks to the massive scope of the two markets in which it operates.

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Why Amazon is just getting started

When it comes to understanding Amazon, the area where I think most investors misstep is in failing to understand the extent of its opportunities in both e-commerce and cloud computing.

In e-commerce, I prefer to look at things two ways. In the U.S. -- Amazon's home market, where it has operated for more than two decades -- e-commerce still represented just 8.3% of total retail transactions in the fourth quarter of 2016,according to Commerce Department data. Globally, e-commerce accounted for 8.7% of retail sales last year,according to eMarketer.

In terms of Amazon's place within global e-commerce, the same eMarketer research indicates that worldwide e-commerce topped $1.9 trillion last year.Amazon's e-commerce sales topped $123 billion last year, which corresponds to an estimated 6% global market share. For context, worldwide e-commerce sales are expected to more than double to $4 trillion by 2020.The numbers here become difficult to fathom. However, given the aggressive moves Amazon is making to vertically integrate its supply chain and expand internationally, Amazon seems like a lock to become the de facto worldwide leader in e-commerce, though regional names such asMercadolibre and Alibaba should be able to thrive as well.

The extent of Amazon's opportunity in the cloud is a bit harder to pin down, since "cloud computing" is often used to describe any number of different services. Research firm IDC estimates that spending on infrastructure-as-a-service and platform-as-a-service -- both of which Amazon provides -- will increase from $70 billion in 2015 to $141 billion by 2019.But, this is just one example. Cloud computing will grow into a gargantuan market in time, and Amazon stands well positioned to remain one of the largest players in this space.

If the e-commerce and cloud computing markets were waves to surf, they would just be beginning to crest today. As the most adept surfer of these two waves, Amazon stands a strong chance to out-maneuver the competition on these two monumental trends that will each reshape the face of business in the years to come.

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Andrew Tonner has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon and MercadoLibre. The Motley Fool has a disclosure policy.