Perhaps one of the notable stock market stories over the last year is the performance of Amazon (AMZN 1.86%). The e-commerce and cloud giant rose by nearly 50% over the previous year amid the continued success tied to e-commerce and the rise of artificial intelligence (AI) as the cloud continued to grow.

The question now is whether that growth can continue. Its market cap now tops $2.4 trillion, and even though its massive size makes high-percentage revenue increases a more difficult task, it appears to have found the formula to maintain a brisk rate of growth for years to come. Here's how.

What makes Amazon different?

Understanding Amazon's edge first means dividing its two e-commerce arms, North America and international, from the Amazon Web Services (AWS) segment, which leads its cloud and AI-related efforts.

On the e-commerce side, one has to remember that not all revenue is created equal. Amazon earned more than $450 billion in revenue in the first nine months of 2024. Of that, $171 billion, or 38%, came from its online stores. This revenue stream grew by just 6%.

However, these segments support Amazon's third-party seller services, advertising services, and subscription services, each of which grew revenue in the double digits.

Additionally, the North America and international segments combined reported operating income of $18 billion in the first three quarters of 2024. With that, its average operating margin was about 5.8% for the North America segment and 2.5% for international.

The relatively scant amount of operating income and the high fixed expenses of its online stores could mean that the online stores business loses money to support its less capital-intensive, tech-related businesses under that umbrella.

Tech also brings high margins to its AWS segment. In the first nine months of 2024, its $79 billion in revenue grew 20%, but made up only 18% of Amazon's overall revenue.

Nonetheless, its $29 billion in operating income in the first nine months of 2024 was 62% of the $49 billion in operating income earned by Amazon during that time. That translated into an operating margin of 37%!

Hence, investors should look at Amazon as a series of comparatively smaller businesses rather than one giant conglomerate. That approach has helped the company grow at a relatively rapid rate despite its massive amount of revenue.

Growth projections

Moreover, none of its major businesses are done growing, which bodes well for the stock's future. Grand View Research forecasts a compound annual growth rate (CAGR) of 19% for the world's e-commerce industry and 21% for the global cloud computing market through 2030. Since Amazon is No. 1 in both these industries, that probably means Amazon will claim the largest share of the potential growth in each industry.

Amid that potential, analysts believe Amazon will grow revenue by 11% in 2024 and at the same rate in 2025. Admittedly, this is not as fast as its much smaller competitor, Shopify, which boasts a $137 billion market cap and is able to keep revenue growth above 20% annually for the foreseeable future. Nonetheless, it should generate enough revenue growth to translate into significant profit increases.

Additionally, its P/E ratio is about 50. While many investors will consider that expensive, Amazon has a long history of earnings multiples far higher than that level. It is also about half of Shopify's 99 P/E ratio, which may keep it attractive as investors look for places to invest additional cash.

Amazon is not done growing yet

Ultimately, neither a massive size nor a slower-growing online stores segment is likely to derail Amazon's growth.

Indeed, growth comes harder for entities with market caps in the trillions, and its online sales business has arguably grown dull.

However, that slow-growth business supports dynamic, faster-growing enterprises under its umbrella. Moreover, its cloud computing segment helps maintain its tech leadership, and, by all appearances, it can still grow rapidly while maintaining a No. 1 position in its respective industries.

Hence, while growth investors tend to prefer smaller enterprises, Amazon's e-commerce and cloud segments show signs of continued growth, undeterred by its considerable size. That factor should help the company crush the market for some time to come.