As of this writing, the Nasdaq Composite index is up an impressive 36% in 2023 (as of Nov. 20). By many definitions, this means that we are in bull-market territory. And for investors, it's a good time to find stocks that can produce strong returns.

A company to keep an eye on, one that's likely on everyone's radar, is none other than Amazon (AMZN 0.55%). The tech juggernaut makes for a compelling investment, even though its shares have soared 74% this year.

Here are two reasons to buy this FAANG stock.

All about artificial intelligence

There hasn't been a hotter topic in the stock market in 2023 than the rise of artificial intelligence (AI). This new technology has the potential to disrupt many industries, while at the same time boosting the productive capacity of companies that are able to harness its advantages. Amazon, through its leadership position in the cloud computing industry with Amazon Web Services (AWS), is poised to ride the AI trend.

CEO Andy Jassy continues to tout the opportunities that AWS has to be a dominant player in the future of AI. Amazon Bedrock, which is a developer toolkit, allows AWS clients to develop their own generative AI-based applications using Amazon's cloud infrastructure.

Moreover, Amazon has partnered with Anthropic, through a $4 billion investment in the AI start-up. Anthropic will use AWS as its cloud provider to develop foundational AI models that other AWS customers can one day utilize. It's a clear example of how Amazon is trying to position itself to be at the forefront of AI innovations. And this could be a boon for its competitive standing over the long term.

Multiple secular tailwinds

As a large tech business with its hands in multiple industry verticals, Amazon has the advantage of benefiting from various tailwinds that can drive growth for many years. This is encouraging for investors who might think growth will be limited given that Amazon generated $554 billion in net sales in the last 12 months, a gargantuan sum.

According to data provided by the Federal Reserve, e-commerce sales represent just 15.6% of overall retail spending in the U.S. This figure is up almost threefold from a 5.9% share exactly 10 years ago. It's anyone's guess how much of retail spending will eventually be attributed to online shopping, but there is still huge potential for Amazon to register gains in its e-commerce operations.

The cloud computing industry also has lots of room to run, primarily as businesses shift their IT spending off the premises. AWS has top market share in the space, thanks to its first-mover advantage. Although its growth has slowed in recent quarters, the chances that AWS will remain at the top of the industry in the future are high due to management's focus on the segment.

With Amazon Prime Video, the business will also benefit from the ongoing shift away from traditional cable TV and toward streaming entertainment. According to Nielsen data, Prime Video commands 3.6% of total TV viewing time in the U.S., behind Netflix. That's a strong position in the industry.

A lesser-known revenue generator is digital advertising. Because Amazon.com gets so much traffic each month, it only makes sense that the company sells ads. This division made sales of over $12 billion last quarter, up 25% year over year. Only Alphabet and Meta Platforms have a greater market share in the domestic digital ad market.

Investors don't need to make things complicated. Keeping it simple is the key. Amazon isn't a stock that wins any points for originality. However, it can be exactly what your portfolio needs to boost returns.