How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Amazon (AMZN) ten years ago? It may not have been easy to hold on to AMZN for all that time, but if you did, how much would your investment be worth today?
Amazon's Business In-Depth
With that in mind, let's take a look at Amazon's main business drivers.
Amazon.com is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe.
Its online retail business revolves around the Prime program well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish footprint in physical grocery supermarket space.
Amazon also enjoys dominant position in the cloud-computing market, particularly in the Infrastructure as a Service (IaaS) space, thanks to Amazon Web Services (AWS), which is one of its high-margin generating businesses.
Amazon has also become a household name with its Alexa powered Echo devices. Artificial Intelligence (AI) backed Alexa is helping the company sell products and services.
Revenues were $513.98 billion in 2022. The company reports revenue under three broad heads—North America, International and AWS, which generated 61.5%, 23% and 15.6% of total revenues, respectively.
Headquartered in Seattle, WA, Amazon targets three categories of customers—consumers, sellers and website developers. Consumers are offered variety, convenience and free delivery of goods displayed on the company’s websites.
The agreements with sellers are varied, enabling them to use the company’s websites to either sell their merchandise directly, or redirect customers to the sellers’ own branded websites. In case of the latter arrangement, Amazon earns a fee for the sales thus generated.
Competition comes in the form of traditional retailers, other online retailers, media companies, web portals, search engines, e-commerce companies and cloud computing service providers.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Amazon, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in September 2013 would be worth $9,424.68, or an 842.47% gain, as of September 18, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 163.65% and the price of gold increased 35.10% over the same time frame in comparison.
Going forward, analysts are expecting more upside for AMZN.
Amazon’s second quarter results were driven by Prime and AWS momentum. Strengthening AWS services portfolio and its growing adoption rate contributed well. Ultrafast delivery services and expanding content portfolio were beneficial. Strengthening relationship with third-party sellers was a positive. Robust advertising business contributed well. Improving Alexa skills along with robust smart home products offerings were tailwinds. The stock has outperformed the industry it belongs to on a year-to-date basis. Amazon’s strong global presence and solid momentum among the small and medium businesses remain other positives. Growing capabilities in grocery, pharmacy, healthcare and autonomous driving are other positives. Also, deepening focus on generative AI is a major tailwind. However, rising inflationary pressure remains a concern.Over the past four weeks, shares have rallied 5.38%, and there have been 13 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report