Here's Why Amazon Is Unstoppable

The trillion-dollar world of shopping has largely moved online, and the invincible czar of e-commerce is Amazon (AMZN) - Get Report .

This e-commerce heavyweight, which is giving giants such as Wal-Mart Stores (WMT) - Get Report and other brick-and-mortar retailers, a run for their money, is one of the few companies with the potential to reach $1 trillion in market value from $316 billion today. Amazon will remain a highly profitable investment for the foreseeable future.

There are a number of reasons why Amazon is so strong, including its success with its Prime service, its hugely popular Amazon Web Services, clear advances in the grocery market/consumables sector and technology-led initiatives.

Even after a healthy price jump over the past five days, in the wake of great operational results that blew away revenue and earnings estimates, investors should lock in their Amazon trades. This momentum stock will continue rising this year and beyond.

With Amazon's stock gaining more than 1,800% over the past 10 years -- a time during which it engineered tenfold revenue growth and a similar expansion in free cash flow -- there are many who think that Amazon could run out of steam.

The e-commerce business is a winner-take-all situation, and other retailers are bearing the brunt of this revolution.

Amazon has two engines of growth.

First, its rapidly growing AWS business is a phenomenon. It is a business with high operating leverage, good margins and the potential to disrupt the information technology world in a manner similar to what e-commerce has done.

Second, Amazon's retail business, which represents 90% of sales, has small margins.

AWS provides Amazon with the potential to deliver even bigger profits. Plus, the company continues to invest in logistics, which could incrementally drive its core retail businesses toward greater profitability, even as costs decline over time. 

With another record profit-making quarter done and dusted, Amazon shares are close to all-time highs, and so the obvious question is, what is next for the company?

The sky looks like it is the limit. Even legendary investor Warren E. Buffett couldn't stop praising Amazon and founder and Chief Executive Jeff Bezos at Berkshire Hathaway's annual shareholder meeting on Saturday.

Amazon in another five to 10 years will eclipse Apple (AAPL) - Get Report in terms of market value. Apple's peak valuation of about $775 billion, if taken as a benchmark, would mean another $450 billion added to Amazon for investors who buy the stock now.

Of course $775 billion isn't a resistance level for Amazon, which is forecast to deliver 57% year-over-year earnings growth annually over the next five years. That is 10 times better than the S&P 500, andApple is expected to deliver a run rate of less than 10%.

As a major beneficiary of the Internet economy and also an ambassador of wealth creation for the American public, Amazon is a double bet on smart shopping and efficient IT. And yet, on a price-to-sales basis, Amazon at 2.95 times is cheaper than Alphabet (6.36 times) and Facebook (18.6 times) and in line with slower-growth Apple (2.25 times).

Apple, Alphabet and Facebook are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stocks here. Want to be alerted before Cramer buys or sells AAPL, GOOGL or FB? Learn more now.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.