The Company Everyone Is Turning to as They Weather the Global Pandemic

The country is frozen in place.

Right now, at least 311 million people in the U.S. are under some sort of shelter-in-place order.

That's more than 90% of the population. It covers 41 states, Washington, D.C., and Puerto Rico. These orders are in place to try to limit – or at least slow – the spread of the COVID-19 pandemic. It means that people aren't allowed to leave their houses except to get basic essentials, like groceries or medicine, or unless it's an emergency.

This has put a huge dent in the retail sector. Physical retailers like Macy's (M) and Kohl's (KSS) have had to furlough the majority of their workers, with Macy's saying the virus has had a "heavy toll" on the retail sector.

With more people staying at home, they're turning to online shopping to get what they need...

In March, online sales increased 25% according to data from Adobe Analytics. And online grocery orders more than doubled.

While retail suffers, there are a handful of companies that will benefit from this increased reliance on e-commerce. But one company stands out from the rest.

Amazon (Nasdaq: AMZN) is the dominant leader in e-commerce in the U.S. Through its online platform, consumers can buy nearly anything they need.

Amazon's e-commerce business brought in nearly $200 billion in sales in 2019. That's 45% of all online sales, according to data from Statista. And Statista expects Amazon to make up half of all e-commerce sales by the end of this year. Perhaps more impressively, Amazon also accounts for about 5% of all retail sales in the U.S.

So when people are buying products online, it's likely that they're turning to Amazon.

Amazon also owns grocery chain Whole Foods, meaning it also benefits from the surge in online grocery delivery. The company said it's working to get groceries delivered as fast as possible, while also saying it has seen an increase in the number of online shoppers looking for grocery delivery.

Amazon noted that it is looking for ways to meet this increased demand. And it's been expanding its grocery delivery to more and more cities, allowing it to take advantage of this demand in more markets.

Amazon already has a wide distribution network for its e-commerce business. So it should be able to utilize that network to quickly expand its grocery-delivery services.

And like retail giant Walmart (WMT), Amazon is also in the middle of a massive hiring push because of coronavirus. The company announced in March that it plans to hire 100,000 new drivers and delivery workers in the U.S. to keep up with a "significant increase in demand."

And this is while many other businesses have had to lay workers off due to coronavirus-related disruptions to operations. Jobless claims are soaring to record highs, and in March the unemployment rate had its largest single-month jump since 1975. But Amazon is seeing such strong demand that it needs to increase its workforce by more than 12%.

And it's not just the e-commerce business that's benefiting from more people being stuck at home...

Amazon's cloud-computing business, called Amazon Web Services ("AWS"), will likely see increased demand, too. With more and more people working from home because of the shelter-in-place orders, cloud data storage is going to see an increase in demand.

That's great news for AWS. You see, Amazon also dominates the cloud-computing industry.

AWS is the leader in cloud computing, much like Amazon is the leader in e-commerce. It makes up 33% of the cloud-services market. That's more than the closest three competitors' market share combined.

So when businesses need to increase their cloud storage capabilities with many employees working from home, there's a good chance they'll turn to AWS to fulfill those needs.

Because of these strengths in its business, Amazon's stock has outperformed the S&P 500 Index during the recent market rout.

While the S&P 500 was down as much as 34% from its February 19 high to its low in March, Amazon fell 23%. And it currently sits 10% below its all-time high from February, while the S&P 500 is still down 23%.

Over the long term, Amazon's outperformance is even more evident. Over the past five years, AMZN shares have skyrocketed more than 400%. That dwarfs the 21% gain for the S&P 500 over the same time frame.

The COVID-19 outbreak is taking its toll on businesses across the U.S. But Amazon's dominant position in both e-commerce and cloud computing ensure that it is positioned to come out on the other side of this crisis stronger. And that means its stock should continue to outperform, too.

Sometimes investing is simple.