Huge and Getting Huger

For most companies, reaching a market value that exceeds $100 billion means a gradual shift into maturity and a slowing of growth. That’s not the case at Amazon.com (Nasdaq: AMZN), though, despite its recent market value near $465 billion. How can that be? Well, the e-commerce revolution is just entering its adolescence. E-commerce accounted for only 8.7 percent of the $22 trillion worldwide retail market in 2016. Clearly, there’s plenty of room for Amazon to continue to expand its market share and sales over the long term. Amazon has been excelling across a broad range of important segments, including e-commerce, cloud computing services, new product hardware (Alexa devices) and original TV shows. Furthermore, it has demonstrated strong revenue growth across its business — revenue in Amazon’s second quarter was up 25 percent year over year. Profits have been slow to appear, as Amazon has invested in growing its business and has competed on price to gain market share, but it’s posting profits now and has been generating free cash flow since the early 2000s. For patient long-term investors who can stomach some volatility, Amazon remains one of the best large-cap growth stocks around. Its shares can seem overvalued, but throughout the company’s history, it has tended to seem overvalued while continuing to grow. (The Motley Fool owns shares of and has recommended Amazon.com.)