With the stock of Amazon (AMZN 1.06%) up 55% year to date, some investors might think it's too late to buy. Yet bulls argue that Amazon has plenty of room to run. So, which is it? Let's find out.

The bear case: The easy money has already been made

The bear case for Amazon centers around the obvious. Shares have already exploded higher in 2023. The stock ranks eighth out of the 100 stocks that make up the Nasdaq 100 -- outpacing fellow mega-caps such as Apple (up 47%), Microsoft (up 41%), and Alphabet (up 35%).

For bears, this year's rally is fools' gold and could quickly fall apart, with various factors that might trigger the collapse:

  • Lower consumer or business spending. 
  • A recession brought on by the Federal Reserve's interest rate hikes.
  • An overall stock market slump.

Moreover, Amazon's lofty price-to-earnings (P/E) multiple can't be ignored. The shares trade at 310 times earnings, the highest level since 2016.

The bull case: The future looks bright

In contrast to the bears, bulls aren't focused on where Amazon stock has been, but where it is going. The strongest argument for owning shares is that the company is well-positioned for the long term.

Consider the hottest topic in investing: artificial intelligence (AI). Amazon has long been at the forefront of AI assistants, producing and selling over 500 million Alexa-enabled devices worldwide. And the company already relies on AI and machine learning to refine its product placement, write product summaries, and manage inventory.

Bulls also point to the stock's price-to-sales (P/S) ratio, which undercuts the argument that shares are expensive. It's only 2.5, still below its 10-year average of 3.1.

Is Amazon a buy now?

Amazon is a great example of why The Motley Fool believes in letting your winners run. For example, if you had bought $10,000 worth of the stock 10 years ago, your investment would now be worth $90,790.

More to the point, I believe this tech giant still has plenty of gas left in the tank. Its cloud segment, Amazon Web Services (AWS), still holds the largest share of the lucrative and rapidly expanding cloud services industry. Consensus estimates place the current size of this market above $500 billion, with some analysts expecting it to surpass $800 billion by 2027.

And its sprawling e-commerce empire has over 200 million Prime members. That segment's profitability appears on the uptick as management has instituted cost-cutting such as reducing its workforce and halting some construction projects.

Amazon remains a corporate juggernaut. It has a strong growth engine centered on its leadership in the expanding cloud services market, and its competent management team cuts costs where necessary. And that's a combination that is never too late to invest in.