Investors are missing the advantage Amazon.com Inc. (AMZN) has in two of the largest trends in technology, leading to the market undervaluing the stock, according to Goldman Sachs.

The major case for Amazon.com right now is that the company is making strides addressing the shift of retail dollars online and the shift of compute dollars into the cloud, Goldman Sachs analyst Heath Terry told CNBC. He argued that as Amazon leads on both of these fronts, its stock could "easily" gain 23% from current levels. (See also: Why Amazon's Stock Will Rise 15% Even Amid Grocery Price Wars.)

Shares of the Seattle-based online retail behemoth have already returned nearly 34% to shareholders year-to-date (YTD). Trading up 1.6% at $1,569.60 on Tuesday afternoon, AMZN reflects a whopping 83.1% gain over the most recent 12 months, ar outperforming the S&P 500's 14.4% increase over the same period. 

Terry, the investment bank's lead internet research analyst, said that Street estimates for both Amazon's leading public cloud business Amazon Web Services (AWS) and its retail business are too low. He highlighted data showing a surge in store closures in the U.S. on the retail side and an acceleration of enterprise spending on the tech side. 

'Really Hard to See' Challenges to Cloud Dominance 

At close to $1,600 per share, a price that is "hard to swallow" for some investors, there is still a great deal of upside in shares, according to the Goldman Sachs analyst, who expects AMZN to reach $1,800 to $1,900 within 12 months. 

He suggested that "it's really hard to see" a future wherein the the leadership position of AWS is eroded by competitors such as Microsoft Corp. (MSFT) with its Azure platform, and Alphabet Inc.'s (GOOG) Google Cloud. Even as rivals double down on initiatives to reel in enterprise customers, Terry is bullish on 12-year-old AWS due to its massive scale and level of profitability relative to competitors. In the most recent fourth quarter, Amazon's public cloud business, its most profitable segment, saw revenues jump 45% to $5.1 billion.  (See also: Why Amazon Could Buy Some Toys R Us Stores.)