Shares of Amazon (AMZN -1.07%) have rallied nearly 600% over the past 10 years. Most of those gains occurred after the company started to separately disclose the growth of its cloud business, Amazon Web Services (AWS), in 2015.

That marked a major turning point for Amazon because it revealed that it could subsidize the expansion of its lower-margin e-commerce business with its higher-margin cloud revenue. AWS also remained the world's largest cloud infrastructure platform by a wide margin, and that scale enabled it to generate consistent profits as its closest competitors -- Microsoft's Azure and Alphabet's Google Cloud -- failed to break even.

A person uses a tablet computer outside.

Image source: Getty Images.

That resilience made Amazon a great play on the secular expansion of the cloud market. It will likely continue to head higher over the next decade, but with its current enterprise value of nearly $1 trillion, this FAANG stock probably won't replicate its previous multibagger gains anytime soon.

Yet growth-oriented investors who missed out on Amazon's gains still have plenty of promising cloud stocks to choose from. My top pick is ServiceNow (NOW -9.71%), a cloud software company that has an enterprise value of about $90 billion.

What does ServiceNow do?

ServiceNow's cloud-based services help companies streamline their unstructured work patterns into automated workflows. That approach can help a company reduce its operating expenses, support hybrid and remote workers, and expand its business more efficiently.

It had over 7,700 customers at the end of 2022, including about 85% of the Fortune 500. ServiceNow's business is well insulated from macroeconomic headwinds, since companies often turn to its cost-cutting tools during economic downturns. But it also flourishes in a stronger economy as those companies expand again.

How fast has ServiceNow been growing?

Between 2017 and 2022, adjusted revenue rose from $1.93 billion to $7.54 billion, which represented a five-year compound annual growth rate (CAGR) of 31%. Its adjusted gross margin also rose from 85% to 86%, while its free-cash-flow margin expanded from 25% to 30%.

Unlike many other high-growth cloud companies, ServiceNow has stayed consistently profitable by both generally accepted accounting principles (GAAP) and non-GAAP metrics. Its annual non-GAAP net income had a CAGR of 48% over the past five years.

ServiceNow's growth has been throttled by currency headwinds over the past year, but it still expects its subscription revenue (which accounts for most of its top line) to rise 23.5% in constant currency terms this year. It also aims to generate over $16 billion in revenue in 2026, which implies its top line will grow at a CAGR of at least 21% over the next four years.

ServiceNow faces competition from other digital transformation players like Salesforce (CRM -20.32%), Atlassian (TEAM -2.44%), and Workday (WDAY -2.60%), but its expanding gross margins and high renewal rate of 98% at the end of 2022 indicate it still has plenty of pricing power in its niche of digital workflow services. It also ended the year with 1,637 customers with average contract values of over $1 million -- which represented 22% growth from a year earlier.

How much larger could ServiceNow grow?

ServiceNow trades at 10 times this year's sales. Salesforce, which faces tougher headwinds and expects to grow at a slower clip than ServiceNow over the next few years, trades at 5 times this year's sales.

Atlassian, which generates comparable revenue growth but isn't profitable on a GAAP basis, trades at 13 times this year's sales. Workday, which is growing slower and is also unprofitable by GAAP measures, trades at 6 times this year's sales. In short, ServiceNow isn't cheap right now, but it looks reasonably valued relative to its closest cloud-based peers.

If ServiceNow's revenue continues to have a CAGR of 20% over the next 10 years, it could generate about $47 billion in revenue in 2032. If it still trades at 10 times sales by then, it could be worth $470 billion -- representing a five-bagger gain from its current enterprise value. Even if its price-to-sales ratio drops to five, it would still be worth around $235 billion.

Those estimates might be too conservative, since they don't account for ServiceNow expanding its ecosystem through more acquisitions. Buying more companies or launching other services on top of its firm foundation of digital workflow services could eventually transform it into a more diversified cloud-based software giant like Salesforce.

So if you're looking for a great cloud stock to simply buy and forget for the next 10 years, I believe ServiceNow ticks all of the right boxes.