The market has risen this year on the back of hot new artificial intelligence (AI) tools from the likes of OpenAI, Microsoft, and Google. These companies are betting the farm on AI.

For example, Microsoft is investing $10 billion into start-up OpenAI to take on the Google search engine monopoly. Seeing potential dollar signs from what could be the next wave in the computing revolution, investors have started to bid up technology stocks. The Nasdaq 100 index is up an incredible 46% so far in 2023.

Technology giant Amazon (AMZN 0.80%) is no stranger to the AI bull market, with its shares up 55% year to date. However, smart investors know that Amazon's earnings power (and over the long term, its stock price) will be impacted by more than just AI tools. Here are three reasons to buy Amazon shares that have nothing to do with AI.

Retail profitability

The COVID-19 pandemic accelerated the consumer transition to e-commerce in the United States. As the largest e-commerce platform in the country with a vertically integrated fulfillment network, Amazon had to invest tens of billions of dollars -- and quickly -- in order to satisfy consumer demand.

This caused the company to grow sales from its e-commerce division quickly but with deteriorating margins. For example, in 2021, North American retail revenue grew 18% year over year to $280 billion but actually saw its operating income decrease from 2020 -- from $8.6 billion to $7.3 billion.

This dynamic only got worse in 2022 as Amazon's growth slowed as the pandemic ended, leaving a lot of its new warehouses sitting idle. In 2022, Amazon's North American retail division posted an operating loss of $2.8 billion.

As Amazon grows into this excess capacity and trims back its pandemic-era expenses, investors should expect North American margins to get back to or exceed pre-pandemic levels. In 2019, this segment had an operating margin of 4.1%. On $350 billion in estimated 2023 North American revenue, those margins would work out to to $14.4 billion in annual operating profits.

Cloud transition is still in its early days

The true profit engine for Amazon is not its e-commerce/retail division, but the cloud computing segment called Amazon Web Services (AWS). This is the leading cloud infrastructure service in the world, with an estimated 32% market share.

That allowed the company to generate $80 billion in revenue last year and a healthy $23 billion in operating income. Even though it generates fewer sales than Amazon's retail division, AWS has much stronger profit margins, making it more valuable to shareholders.

Estimates have the cloud infrastructure market still in its early days. Analysts expect the industry to grow at around 15% a year through 2030 as companies transition their IT spending from on-premise servers to outsourced services such as AWS.

If AWS can retain its 32% market share and grow along with the industry, it will be doing $200 billion in revenue by 2030, or more than double its 2022 numbers. As long as margins stay around where they are today, this should be hugely accretive to Amazon's consolidated profitability.

Growth in advertising

The driver of Amazon's retail (or everything excluding AWS) margins higher than pre-pandemic levels will be its fast-growing advertising segment. This was only a tiny part of Amazon's revenue in 2019 but has since exploded to $39.4 billion in trailing-12-month revenue.

These revenue dollars are coming in at extremely high margins as they're mainly just sponsored listings by sellers on the Amazon website and require no new physical costs from the company. Investors should be tracking this segment and hoping it continues to grow rapidly for the next few years, which will help Amazon's overall profitability.

Don't just buy stocks because of the 2023 narrative around AI. Amazon is at a profit inflection and could still be an outstanding stock to own over the long term, regardless of what new AI products it may or may not cook up.