Investors who have held Amazon‘s (AMZN 1.59%) shares for a long time are clearly pleased. The company has delivered life-changing returns. Given its compound annual growth rate of 31.2% since 1997, the tech giant has turned a modest $500 investment 28 years ago into more than $1 million.

That’s amazing. And the best news is that Amazon could make even more millionaires moving forward. The company still has significant growth opportunities that should allow it to deliver outstanding returns over the long run, even with a market cap of $2.4 trillion.

AMZN Total Return Level data by YCharts

Amazon’s secret

One of the factors that made Amazon so successful was that the company identified attractive, long-term growth opportunities and successfully established itself as one of the leaders (or the leader) in these markets. That’s what it did in e-commerce and cloud computing. Another important aspect of Amazon’s strategy has been its ruthless focus on customer service. Putting consumers’ needs first has helped the company attract 200 million Prime members.

Amazon spent a small fortune building a fulfillment network capable of supporting fast, one- or two-day shipping on millions of items and, sometimes, same-day delivery.

Image source: Getty Images.

The copmany has built an economic moat from multiple sources thanks to its efforts. First, its brand name is practically synonymous with online shopping for many people, especially when they want something delivered quickly. Second, Amazon’s e-commerce platform boasts strong network effects.

Third, Amazon’s cloud business, Amazon Web Services (AWS), benefits from high switching costs. Many clients use a range of complementary AWS tools and benefit from meaningful cost savings when they sign long-term contracts. All these factors help lock customers in to the company’s ecosystem.

Multiple growth paths

Amazon has made tremendous progress over the past few decades. But the company’s growth opportunities remain intact. Let’s start with e-commerce. Despite appearances, it still only accounts for 16.3% of total retail transactions in the U.S. That means fewer than 1 in 5 purchases are made via an e-commerce platform. That’s not that much. And for what it’s worth, Amazon is the runaway leader in this market. The company will benefit as e-commerce grows.

True, it’s not a particularly high-margin opportunity for the company. However, Amazon is working on that issue. It has launched a fleet of industrial robots to help boost efficiency in its warehouses. The company is still putting consumers first. This initiative will help speed up delivery times and cut costs for shoppers. And by some estimates, it will also help Amazon cut costs. Everyone wins. Amazon’s e-commerce operations could see slightly higher margins in the future, and even a modest improvement in that department will help boost the bottom line.

Amazon

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$226.64

Then there is cloud computing and artificial intelligence (AI). CEO Andy Jassy said a couple of years ago that generative AI may be the largest technological transformation since the internet. He believes we are still in the early innings of cloud and AI growth opportunities, as 85% of IT spending still occurs on-premises. Amazon also leads the global cloud computing market, although its closest competitors are closing the gap. Even so, the tech giant is a leader in two industries with massive long-term prospects.

That’s an excellent sign for the future. Then there is Amazon’s advertising business, which should continue to grow, given that the company remains one of the most visited websites in the world. Other initiatives could matter down the road, too. Amazon’s ventures in healthcare, for instance. Then there is the fact that Amazon generates massive amounts of free cash flow and has the tools to invest in other attractive opportunities.

The bottom line: The stock hasn’t peaked yet. Amazon’s long-term prospects remain incredibly attractive, and it could make even more millionaires in the next two decades.