E-Commerce Adoption Still Has 83.7% to Go: Buy This Market Leader Now

We live in an age when people can communicate, shop, move money, educate themselves, and more just by clicking a button on their phone or computer. With the arrival of artificial intelligence (AI) these past few years, investors have enjoyed strong returns from top technology stocks.

E-commerce was one of the earliest market opportunities of the internet age, and people have been shopping online for decades now. Yet, there is still a long runway ahead for e-commerce adoption. Online sales accounted for just 16.3% of total retail spending in the second quarter of 2025.

The stock of Amazon (NASDAQ: AMZN), the leading e-commerce company in the U.S., recently tumbled 11% from its high amid market volatility. Here is why investors may want to buy the dip now.

Image source: Amazon.

Amazon's competitive moat is nearly impossible to breach

As competitive as the retail space is, Amazon has opened up an imposing lead in e-commerce. The company has an estimated market share of nearly 40% in U.S. online retail, with almost no other company having even a double-digit share.

How did this happen, and why is Amazon likely to retain its dominance, if not build upon it? First, the company has competitive moats in its brand and supply chain. People generally think of it now when they want to buy something online -- and all those Amazon delivery vans help advertise the brand.

Second, its fulfillment network is unmatched. Countless distribution centers and enough delivery vehicles to be seen on virtually every neighborhood street across America enable the company to offer a selection of products at low prices and deliver them to your door very quickly, sometimes within hours.

Lastly, it has a huge customer base built through its Amazon Prime subscriptions, which offer extra perks. No company is immune to threats, but with over 200 million Prime memberships and entrenched advantages in pricing and delivery, it's hard to see how another competitor can knock Amazon off the top of the e-commerce mountain anytime soon.

Ample opportunities to grow as e-commerce adoption continues

As big as e-commerce has become, it still accounts for less than a fifth of total retail spending, so there is a lot of room for the company to expand. Two examples of that are groceries and automobiles, where Amazon has been investing.

It now offers same-day delivery of packaged and fresh groceries to over 2,300 towns and cities across the U.S. Amazon is also partnering with automotive manufacturers and dealers, so shoppers can buy a new or used vehicle on the company's marketplace and schedule delivery to a dealership.

Over the coming years, it seems likely that people will continue to shift more of their spending online. It also looks increasingly likely that Amazon will serve many of those needs. Its dominance makes it a strong bet to keep growing as e-commerce adoption rises.

AI exposure strengthens Amazon's foundation

If all of that weren't enough, Amazon has an advantage with its cloud segment, Amazon Web Services (AWS). It's the world's leading cloud computing business, with an estimated 29% global market share. AWS is a foundation for the internet and for AI, which is funneling business to AWS, the company's most profitable segment.

Broader AI technology could be a game-changer for its e-commerce operations, too. Imagine having humanoid robots deliver your packages: Amazon has already started testing that. Or, having orders automatically picked and shipped from distribution centers without human intervention: Management is already on the way there.

A recent report on leaked Amazon documents suggested that AI and robotics could replace hundreds of thousands of employees in the future. That will likely lower costs and boost profits -- the company probably wouldn't be working on these things if they wouldn't.

Nobody can predict what will happen tomorrow, let alone next year or beyond. That said, Amazon seems firmly on a path to continue its impressive trajectory, with technology and continued e-commerce adoption combining to lift its business to new heights. Double-digit declines in such a well-positioned stock are often a solid buying opportunity for long-term investors.

Justin Pope 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.