When I last wrote about Amazon (NASDAQ:AMZN) stock in early September, its stock had just hit its all-time high of $3,552. “Buy Amazon only if ‘good’ is good enough for you,” I wrote, calling the valuations “nosebleed.”

Since then, AMZN stock has slid 10% from its peak.

While still not cheap, the stock’s slight discount should be enough for investors looking for a reasonable entry point. That’s because Amazon’s steady growth will continue to surprise — not for its speed, but its longevity. And if there’s one investment theme we’ve learned from the novel coronavirus lockdowns, it’s that we’re still in the early days for ecommerce. With Amazon sitting on the right side of history, long-term investors should consider picking up some shares.

AMZN Stock: A Long-Term Play on Ecommerce

Tech investors looking for growth should remember the Technology Adoption Life Cycle — a chart developed in the late 50’s to describe the acceptance of a new product or innovation. Innovators initially adopt these new tools — mid-1990s tech enthusiasts, for instance, who bought broken laser pointers online. (That was eBay’s first sale.)

As technologies mature, innovators are followed by 2) early adopters, 3) early majority, 4) late majority and then, finally, 5) laggards.

Through much of its history, Amazon has worked with “early adopters” and “early majority” customers. As dominant as the ecommerce giant might seem, most people still buy goods in-person. Even by 2019, online shopping made up just 16% of U.S. sales, according to Digital Commerce 360, an ecommerce news and research organization.

Amazon Struggles to Tempt Late Majority

Working with the “early majority” initially worked wonders for Amazon — it has since grown into one of the world’s most valuable companies. However, the ecommerce firm faced increasing issues with tempting the “late majority” to sign up. By 2019, growth had slowed to just 20%, despite the company’s best efforts at alternative marketing. That year, for instance, Amazon pumped $7 billion into video and music content creation, or almost half of Netflix’s (NASDAQ:NFLX) budget.

Amazon’s valuation reflected that reality. By early 2020, its EV-to-EBITDA margin had compressed to 22 times, its lowest value since the 2008 financial crisis. (That’s where Costco (NASDAQ:COST) and Texas Instruments (NASDAQ:TXN) sit today).

And then the coronavirus pandemic hit.

Covid-19 Provides More Than a Short-Term Boost

In September, eMarketer, a market research firm, estimated that the coronavirus lockdowns would help Amazon add a record 18.5 million prime members in 2020. In other words, over 50% of the country’s total population would have an Amazon Prime membership by year-end.

The fact is remarkable. Not only would Amazon reach more people. But current customers would also buy more thanks to the coronavirus lockdowns. It’s a change of habit forced by necessity and cemented by repetition. In other words, the company has finally managed to crack the “late majority” crowd.

The $300,000 Amazon Haircut

Instead of buying something on Amazon Prime Day this year, why not consider AMZN stock instead?

In August, Jason Zweig at the Wall Street Journal reflected on a written conversation he’d had with Warren Buffett. Mr. Buffett had reflected on “The Methuselah Technique,” a combination of pairing a long life with attractive investment returns.

Put another way, imagine you had $25 to spend. That amount could buy you a good hair cut in most places. Now, imagine putting that amount into the stock market instead. Thanks to the nature of compound returns, the money would grow faster and faster over time — and $25 left to compound at 10% per year turns into $300,000 after around 100 years.

“Do I really want to spend $300,000 for this haircut?” a young Mr. Buffett would often mutter.

Amazon stock could act in the same way. According to Finbox, a financial modeling firm, Amazon’s stock currently suggests an 8.1% discount rate — its long-term implied rate of return. While it’s not as good as 11.5%, the figure Amazon reached during the depths of the coronavirus pandemic, the current rate should still reward long-term investors.

So, instead of buying a new $1,650 Apple iMac this year, what about putting it away in Amazon fractional shares? In 25 years, that money would turn into $10,000, given an 8.1% growth rate.

Amazon International: A Hidden Growth Avenue

As Amazon converts more “late majority” U.S. shoppers to its site, investors should also remember that Amazon also has two other high-potential segments: international and AWS cloud computing.

• International: 26% of sales, growing at 38%
• AWS Cloud Computing: 13% of sales, growing at 29%

In Germany, for instance, shoppers bought only 8.8% of retail sales online, according to eMarketer. That puts Amazon in a strong position to grow for many years to come. And in cloud computing, the IDC, a market research company, estimates spending to double between 2019-2023. That provides Amazon with a strong pipeline of growth opportunities.

What Should Investors Do with AMZN Stock?

As I wrote before, AMZN stock won’t reward future investors with 1,000%-per-year lottery payouts — you need far smaller companies for that to happen. It’s also not an ideal company for day traders, given its relative price stability. (Not to mention the losses that day traders generally face as a group).

The ecommerce behemoth, however, will provide investors with a safer long-term alternative to other single-stock names. It’s going to have the excitement level of watching paint dry. But for serious long-term investors, Amazon’s a beautiful company to have under your belt.

On the date of publication, Tom Yeung did not have (either directly or indirectly) any positions in the securities mentioned in this article.