While this bump in sales could flatten out again as the pandemic subsides, Amazon is also poised to be a beneficiary of what some experts predict will be a longer-term shift in how consumers shop. “2020 is setting up to be an e-commerce inflection year as the combination of shelter-in-place, lower spend on experiences (dining out, bars, travel, etc) and [government] stimulus have driven dollars online,” Morgan Stanley analysts wrote in a June 1 research note to clients. As the dominant online retailer in the US by a wide margin, Amazon would have an advantage in this environment.

That doesn’t come without its challenges. Amazon is also coping with higher expenses. Founder and CEO Jeff Bezos warned investors that the company expects to spend the entirety of this quarter’s expected $4 billion in operating profit on “Covid-related expenses,” such as measures to keep employees safe, and to keep its delivery and inventory operations (also known as fulfillment) running smoothly.

But Amazon has long prioritized growth over profit anyway, and now the company has access to some of the cheapest funding on record. This week the e-commerce giant borrowed $10 billion in the US corporate bond market across a range of maturities. Some of those securities (those that come due in three, five, seven, and 10 years) had the lowest yields of any dollar-denominated company bond since at least 1980, according to Refinitiv.

Borrowing costs have plunged since the US Federal Reserve pledged in March to buy company debt for the first time, providing a backstop for the credit market. While the Fed’s emergency plan was designed to support companies that have been imperiled by the recession, Amazon’s corporate bond deal shows strong companies have been beneficiaries as well.

Product sales aren’t the only way Amazon makes its money. Amid widespread social distancing and remote working, companies are leaning on cloud computing providers like Amazon Web Services (AWS). The unit’s revenue jumped more than 30% from a year earlier in the first quarter, generating more than $10 billion of quarterly revenue for the first time. AWS customers include streaming video provider Netflix and Slack, a messaging platform for businesses.

Not every customer is ramping up its cloud computing. “What we’re seeing kind of post-Covid is it varies by industry,” Brian Olsavsky, Amazon’s chief financial officer, said in an earnings call. “Things like video conferencing, gaming, remote learning, entertainment, all are seeing much higher growth and usage. And things like hospitality and travel certainly have contracted very severely, very quickly. So I think there’s going to be a mixed bag on industries.”

Still, the company’s service sales have continued to grow faster than its product sales. These sales include AWS, but also fees it collects from its expanding base of third-party sellers, advertisers, subscribers to its Prime membership program, and subscribers to certain digital content.

Amazon, with a market capitalization of $1.2 trillion, is one of the most valuable companies in the world and its shares have risen more than 30% this year. But it’s not the only e-commerce company that’s soaring in the stock market.

Wayfair, the online furniture and home goods seller, has rallied even more, with shares that have doubled in price in 2020. Etsy, a platform that specializes in handmade products, said its marketplace grew 100% in April, and its stock has gained more than 90%. “One big driver of the strong growth in April was fabric face masks,” Etsy CEO Joshua Silverman said in an earnings call on June 2. 

Chewy, an online company for pet products, has jumped about 75% this year, while US shares for Chinese e-commerce giant JD.com have rallied about 60%.

All that is to say that while Amazon isn’t the only company that’s benefitting from the surge in e-commerce and cloud computing, it remains one of the biggest beneficiaries.

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