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After a stock has skyrocketed, it's fair to take a step back and ask whether that particular player still makes a good buy. You may be thinking that this kind of momentum can't last forever and the stock is looking pretty expensive now. Often, you could be right.

But some stocks, even after enormous gains, have what it takes to keep the good times rolling. If you avoid them because they increased a lot in value, you may miss out on a very valuable investment opportunity.

All of this means it's important to look at every stock market winner on a case-by-case basis before deciding whether to buy, sell, hold, or avoid. Considering all of this, let's take a look at e-commerce and cloud computing giant Amazon (AMZN -0.39%), a stock that delivered an 80% gain last year. Is this consumer goods and technology giant still a buy?

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Amazon stock was on fire last year, following a difficult 2022. The company reported its first annual loss in almost a decade after facing a variety of challenges -- from the pressure of higher interest rates to overcapacity across its fulfillment network. The tough times prompted Amazon to improve its cost structure, something that quickly set the company on the road to recovery.

Amazon cut tens of thousands of jobs, improved efficiency across the company, and shifted investment to high-growth areas -- such as technology infrastructure to support its cloud computing business, Amazon Web Services (AWS). The company also switched its U.S. fulfillment model to a regional one from a national one, making delivery cheaper and faster.

As a result, Amazon reported quarterly profits last year and progressively improved other financial metrics. By the third quarter, the company announced a double-digit increase in sales to $143 billion, net income more than tripled, and free cash flow advanced to an inflow of more than $21 billion from an outflow a year earlier.

Importantly, the changes Amazon made to its cost structure aren't just moves to help the company during difficult times. Instead, these steps should help Amazon gain customers, keep costs in check, and grow its business well into the future -- and all of this could equal earnings and share-price growth during better economic times, too.

For example, by making key inventory items available in eight regions around the country, Amazon is able to lower its cost to serve. By ensuring speedy delivery, the company is increasing its chances customers will keep coming back. That scores two wins for Amazon and should help the company maintain its dominance in the high-growth e-commerce market.

Another example is Amazon's investments in artificial intelligence (AI). The company uses AI for its own purposes, such as optimizing warehouse operations. It also offers AWS customers platforms so they can launch their own generative AI projects -- without having to do any heavy lifting.

This is thanks to services like Amazon Bedrock, a platform that gives companies access to top foundation models they can customize to suit their needs. AWS already is the world's No. 1 cloud computing services provider, and its prioritization of AI should help it keep that spot.

All of this points to Amazon having what it takes to gain over time. And analyst forecasts for more than 79% growth per year over the next five years reinforces that.

But could the stock possibly climb in the near term, too? Amazon has only just started reaping the rewards of its cost-structure improvements and other efforts.

In the most recent earnings report, CEO Andy Jassy said, "We have a long way before being out of ideas to improve cost and speed" of delivery. And the company, from e-commerce to cloud computing, also should benefit as economic pressures lift.

This means that right now, Amazon is trading at 43x forward earnings estimates, about half of its valuation by this measure a couple of years ago. This looks reasonably priced. And that's why this top technology stock still is a great buy right now, even after soaring last year.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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After Gaining 80% in 2023, Is Amazon Still a Buy? - The Motley Fool