Amazon (NASDAQ: AMZN) has been one of the biggest winners since the start of this millennium and has delivered stellar returns for long-term investors. On the other hand, the e-commerce and cloud-computing giant has actually been lagging behind the broader market in 2024.

While Amazon stock has risen roughly 17.5% across this year's trading, the S&P 500 index has delivered a dividend-adjusted total return of 19.5% as of this writing.

Even though Amazon has underperformed the benchmark index this year, investors shouldn't bet on that continuing to be the case over the long term. In fact, the stage appears to be set for the stock to deliver market-crushing returns over the next five years -- and artificial intelligence (AI) could be at the center of an incredible transformation.

Amazon can still deliver huge earnings growth

Take a look at the chart below, which tracks Amazon's quarterly operating margin over the last five years.

As the chart shows, the tech giant's operating margin has seen some big swings -- but it's trending in an encouraging direction. Some key macroeconomic pressures began easing in 2023, and performance across two quarters in 2024 seemingly has the company on track to record its highest-ever annual operating margin. There are good reasons to think that performance will continue to improve.

Driven by the still growing, higher margin Amazon Web Services (AWS) cloud services business, and the rapidly expanding -- and highly profitable -- digital advertising business, overall margins have expanded since 2023.

While the e-commerce business still accounts for the majority of total sales, AWS and the digital ads business should continue to account for a growing portion of sales, helping push margins and overall profits higher. Even better, there's a good chance its massive online retail business will become significantly more profitable thanks to the rise of AI and robotics.

Despite generating huge amounts of revenue, e-commerce is still a relatively low-margin business for Amazon. If automation meaningfully reduces costs for this segment, the company's earnings and share price should soar.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

Prediction: Amazon Stock Will Soar Over the Next 5 Years. Here's 1 Reason Why. was originally published by The Motley Fool