With the S&P 500 up 16% this year, investors are growing enthusiastic about the stock market again. We're still technically in a bear market according to many opinions, but many stocks have been skyrocketing.

We may not enter a strong bull market until high inflation subsides and the Federal Reserve lowers interest rates. The economy is still dealing with some turmoil, and companies are balancing growth ventures and efficiency. Many of last year's worst performers have made the necessary adjustments to the current situation and are now working back up from a place of strength.

Amazon (AMZN 1.74%) was highly impacted by changing economic trends last year, and its stock slumped 50%, much worse than the market's nearly 20% drop. But it's far outdoing the market so far in 2023, up 65% year to date. Let's see what investors are excited about and why now is a great time to buy Amazon stock.

1. It's harnessing its vast opportunities

Amazon is an acquisitions master. It began scooping up other companies way back when it was just getting started, expanding its business by leaps and bounds, and that continues through today. It has completed four acquisitions over the past three years.

Two of its recent high-profile acquisitions were MGM Studios, a major movie production company, and 1Life Healthcare, a telehealth service doing business as One Medical. Owning MGM allows Amazon's streaming business to compete with the large players like Netflix and Walt Disney as competition becomes fierce and streamers struggle with profitability and saturation. It came with a huge content library that adds tremendous value to Amazon's own studios and content.

One Medical is a small piece of the Amazon pie so far, but it presents a huge opportunity. Amazon has gotten into the healthcare field in various ways over the past few years, including its pharmacy division and its internal healthcare business, which it's spinning out into a consumer-facing business through One Medical. "We think healthcare is high on the list of experiences that need reinvention," was Amazon's take on the deal.

This venture gives it hands-on experience in how healthcare works today and the chance to reinvent it in Amazon's signature style. The pharmacy segment recently signed with a major California insurance company to supply delivery orders, and this could explode into a major revenue driver over the long term as it captures new markets and inks more deals.

Amazon reports healthcare operations in its "other" segment, which also includes things like shipping services, co-branded credit cards, and video licensing. In the 2023 second quarter, this was the fastest-growing segment, with sales up 26% over last year. It represents smaller businesses, but they clearly pack a lot of punch and could be shaped into new growth categories.

2. There's strength in its core activities 

Amazon's main business, though, is e-commerce, which is slowing. Revenue from what Amazon calls online stores increased 4% over last year in the second quarter, but third-party sales increased 18%.

Amazon has made changes to improve its delivery systems and generate loyalty and growth. Over half of orders were delivered same or next day in the second quarter for many of its markets, and it's reaching a rate that's 4 times higher than in 2019. 

Advertising remains a huge growth driver, increasing 22% over last year. This is a major part of where Amazon's artificial intelligence (AI) plays a starring role, leading customers toward curated ads.

Amazon Web Services still punches above its weight in profit generation, responsible for most of the company's operating income in the second quarter. However, sales are sluggish here, too. They increased 12% over last year, only slightly above 11% for the company total. Management is investing here, too, specifically in generative AI capabilities. Although AWS has lost market share to smaller competitors over the past year, it's working to pad its moat through proprietary technology that gives it an advantage long term.

These categories bring in tons of cash for Amazon and give it the funds to try out all of its next growth ventures.

3. The price is right

Amazon has tightened it belt after expanding early in the pandemic, and after posting its first annual loss in about a decade last year, it's getting back to stronger sales and profits. It's taking steps to conquer new territory, giving it a wide growth runway.

Management is guiding for sales to increase about 11% year over year in the third quarter and for operating income to more than double. That update was well-received by investors.

In some ways, Amazon is just getting started, and as the stock climbs back up, it looks like a great buying opportunity.