Amazon (AMZN -0.83%) has come a long way since starting out as an online book retailer in 1994. After branching out to digital music and videos in 1998, the company has gone on to become an e-commerce titan and a dominating force in the cloud market with Amazon Web Services (AWS), and has expanded to many other industries.
In 2022, the company's stock plunged almost 50% on account of macroeconomic headwinds detrimental to its e-commerce business. However, Amazon has retained significant long-term growth despite the sell-off.
So an investment even just a decade ago would have yielded substantial gains for patient investors. Here's how much you would have accumulated if you had invested $10,000 in Amazon's stock in 2013.
Stellar long-term growth
From 2014 to 2022, e-commerce sales rose over 320% from a value of $1.34 billion to $5.72 billion, with the market projected to hit $8.15 billion by 2026. Meanwhile, Amazon's revenue has risen by 741% in the last 10 years to $513.98 billion, and operating income has increased 1,700% to $12.25 billion.
The rise of digital shopping drove much of Amazon's growth over the years, with the e-commerce giant leading the U.S. market share at 37.8% by June 2022. In comparison, the second-largest market share went to Walmart with 6.3%.
Amazon's e-commerce business stumbled amid economic declines in 2022, with its related segments reporting combined operating losses of $10.5 billion in the year. However, the industry is projected to continue expanding at a compound annual growth rate (CAGR) of 14.7% through 2027, with Amazon likely to profit significantly along the way.
Moreover, Amazon's best move over the years has been the launch of its cloud platform AWS. The service was responsible for 100% of Amazon's $12.2 billion in operating income in 2022, after a 28.7% year-over-year rise in revenue of $80 billion. AWS holds a leading 34% market share in the cloud industry, a lucrative position considering the market is expected to grow at a CAGR of 14.1% through 2030, according to Grand View Research.
Amazon shares have soared 612% in the last 10 years alongside its immense success, even taking into account the sell-off in 2022. As a result, those who bought $10,000 worth of Amazon's stock in January 2013 would have $78,138.51 today, with an annual rate of return of 22.42%. The growth proves the importance of holding stocks over the long term, as doing so can safeguard your investment against short-term headwinds.
Should you invest in Amazon stock?
Amazon has clearly provided investors with substantial growth in the last 10 years. However, deciding whether now is the best time to invest is a bit more complex.
After a year plagued with declines, Amazon started 2023 at a disadvantage. Compared to the competition, its free cash flow plunged throughout 2022, as seen in the chart below.
The deep valley in Amazon's free cash flow over the last year illustrates how the company's business was far more vulnerable to economic declines than its peers. Its steep financial decline over the last year has led its price-to-earnings ratio (P/E) to soar 66% and made it far higher than the competition. Take a look below.
Among the biggest names in tech, Amazon's P/E is the only one to have risen over the last year, while the other companies have seen the same metric decline as their stocks have increased in value.
Amazon likely has a long and fruitful future ahead. It is a leader in two high-growth markets, and its impressive development over the last decade makes its stock a good investment to hold for many years. However, right now, more attractive options are available, such as the other companies displayed in the charts above. Therefore, it's best to invest your money elsewhere for now and keep an eye on Amazon's stock to buy at the right time.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Microsoft, and Walmart. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
FAQs
Amazon shares have soared 612% in the last 10 years alongside its immense success, even taking into account the sell-off in 2022. As a result, those who bought $10,000 worth of Amazon's stock in January 2013 would have $78,138.51 today, with an annual rate of return of 22.42%.
What if I invested in Amazon 10 years ago? ›
If you had invested in Amazon ten years ago, you're probably feeling pretty good about your investment today. A $1000 investment made in March 2014 would be worth $9,565.47, or an 856.55% gain, as of March 15, 2024, according to our calculations.
How much $10000 invested in Tesla stock 10 years ago is worth now? ›
As of March 28, 2024, the price of Tesla's stock was $175.79. Ten years ago, at market close on March 28, 2014, Tesla's stock was trading at $14.16 per share. This means that $10,000 invested in Tesla in March 2014 would be worth about $124,145 today.
What will 1 share of Amazon stock be worth in 10 years? ›
Analysts at Coin Price Forecast do offer a 2034 projection for Amazon stock, estimating a 10-year price increase of 276%, to $672 per share.
How much is $10,000 invested in Amazon 20 years ago? ›
Those gains translate to a 23.2% compound annual growth rate for Amazon compared to a 6.2% CAGR for the S&P 500 in that time. As a result, $10,000 in AMZN stock purchased 20 years ago would now be worth $645,262.
What if I invested $1,000 in Amazon 10 years ago? ›
If you had invested in Amazon ten years ago, you're probably feeling pretty good about your investment today. According to our calculations, a $1000 investment made in November 2013 would be worth $8,061.01, or a gain of 706.10%, as of November 21, 2023, and this return excludes dividends but includes price increases.
What if you put $1000 in Amazon 10 years ago? ›
If you'd had the nerves of steel to invest $1,000 in Amazon in March, 2014 that investment would be worth $9,279 today. That's close to an 830% return, compared to 174% in the S&P 500 over the same period. That is a truly incredible figure. Few companies can claim this sort of compounding over any time frame.
What will Tesla stock be worth in 2030? ›
He forecasts Tesla stock to gain about 550% to hit $1,200 a share by 2030, and for SpaceX to triple in valuation over the same period, according to a recent interview conducted by Bloomberg. Baron runs the Baron Focused Growth Fund, which counted Tesla and SpaceX as its largest holdings as of December 31, 2023.
What if I invested $1,000 in Tesla 10 years ago? ›
This means that your $1,000 10 years ago — technically, $1,002 — would have bought 60 shares of Tesla. As of Mar. 3, 2024, those 60 shares of Tesla would be worth $12,158.40. That marks a 28.342% annual rate of return.
What if you invested $1,000 in Tesla in 2012? ›
With all of this in mind — considering a $251.34 share price at the time of publication — an initial $1,000 investment on June 22, 2012, would be worth more than $1.73 million today. Tesla has revolutionized the electric vehicle market in 20 years.
I like valuing the stock on its operating cash flow because Amazon invests heavily in growing the business, even at its current size. If you compare the share price to the operating cash flow per share, the stock is still cheap relative to its long-term average. Investors can confidently add Amazon to their portfolios.
Is Amazon stock a good long-term hold? ›
Amazon's (NASDAQ: AMZN) stock has turned in extraordinary returns over the years. In the last decade, the share price's 975% gain dwarfed the S&P 500's 167%. That's been very rewarding for long-term shareholders. It's tempting to hold on, or if you don't own the shares, jump on the bandwagon.
Is AMZN a good long-term investment? ›
For fiscal 2024, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.04 to $4.10 per share. AMZN boasts an average earnings surprise of 51%. With a solid Zacks Rank and top-tier Value and VGM Style Scores, AMZN should be on investors' short list.
Is it safe to invest in Amazon? ›
After examining many stocks in today's market, I've concluded that Amazon (AMZN -1.25%) is one of the best buys available. Even though it's had a strong 2024, up 11%, I still think there is room for upside. I've pinpointed five factors that make Amazon a strong buy now, even with its great performance in 2024.
What will $10,000 be worth in 20 years? ›
The table below shows the present value (PV) of $10,000 in 20 years for interest rates from 2% to 30%. As you will see, the future value of $10,000 over 20 years can range from $14,859.47 to $1,900,496.38.
What if you invested $1 000 in Amazon 5 years ago? ›
Five years ago, Amazon shares were $70.26 each. So, with $1,000 to invest, I could have bought 14 shares, leaving me $16.36 as spare change. At today's share price of $97.24, my position would be worth $1,361.36. Despite the roller-coaster ride, that's still a respectable 38% return over five years.
What if you bought $1,000 shares of Amazon in 1997? ›
Investors who bought $1,000 of Amazon shares at the time of its IPO could have bought 18.55 AMZN shares based on the $18 price point. Stock splits of Amazon in June 1998 (2:1), January 1999 (3:1), September 1999 (2:1) and June 2022 (20:1) would have turned the 18.55 AMZN shares into 13,334.4 shares today.
How much would a $10000 investment in Amazon IPO be worth today? ›
An investment of $10,000 at Amazon's IPO would be worth a whopping $11.5 million today.
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