If You Invested $1000 in Amazon a Decade Ago, This is How Much It'd Be Worth Now (2024)
Zacks Equity Research
·3 min read
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
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?
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 $574.8 billion in 2023. The company reports revenue under three broad heads—North America, International and AWS, which generated 61.4%, 22.8% and 15.8% 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.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Amazon a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in February 2014 would be worth $10,069.21, or a 906.92% gain, as of February 23, 2024, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 177.03% and gold's return of 47.01% over the same time frame.
Going forward, analysts are expecting more upside for AMZN.
Amazon’s fourth quarter results were driven by Prime and AWS momentum. The stock has outperformed the industry it belongs to over a year. Strengthening AWS services portfolio and its growing adoption rate contributed well to AWS performance. Ultrafast delivery services and expanding content portfolio were beneficial. Strengthening relationship with third-party sellers was a positive. Robust advertising business contributed well. Notably, improving Alexa skills along with robust smart home products offerings remains tailwinds. Amazon’s strong global presence and solid momentum among the small and medium businesses remain positives. Growing capabilities in grocery, pharmacy, healthcare and autonomous driving are other positives. Also, deepening focus on generative AI is a major plus. However, macroeconomic challenges remain concerns.
Over the past four weeks, shares have rallied 10.67%, and there have been 15 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.
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If you'd had the nerves of steel to invest $1,000 in Amazon
Amazon
Amazon.com, Inc., doing business as Amazon (/ˈæməzɒn/, AM-ə-zon; UK also /ˈæməzən/, AM-ə-zən), is an American multinational technology company, engaged in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence.
https://en.wikipedia.org › wiki › Amazon_(company)
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.
If you had invested $1,000 in Google stock on Aug. 19, 2004, today, you would have $60,107. Likewise, if you had invested $1,000 in an index fund replicating Nasdaq, you would have $9,000.
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. A $10,000 investment in the S&P over the same period, however, would amount to $33,452.
It used to be that public investors who got in on the ground floor of an initial offering could earn historic gains. If you invested $1,000 in Amazon at its I.P.O. in 1997, you would now have nearly $250,000.
As a result, an investment of $10,000 a decade ago would be worth over $107,000 today. The company made many millionaires over the last decade, begging the question: Does it still have much to offer new investors? Let's examine Amazon's business more closely and determine whether it's still worth investing in in 2024.
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.
So, if you had invested in Netflix ten years ago, you're likely feeling pretty good about your investment today. A $1000 investment made in March 2014 would be worth $9,728.72, or a gain of 872.87%, as of March 4, 2024, according to our calculations. This return excludes dividends but includes price appreciation.
For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
Key Points. Amazon's annual revenue and operating income have more than doubled over the last five years. The company will likely profit from the tailwinds of e-commerce and the cloud market for years. Earnings per share estimates indicate a 66% upside for Amazon's shares over the next two years.
This e-commerce giant has good reasons to keep performing in the years to come. Amazon (AMZN -2.52%) has been a significant winner over the last two decades, generating enormous wealth for its investors.
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. This means that if you had invested $120,954.87 in Tesla stock in 2014, you may have been able to sell it today and retire.
Of the 63 Amazon stock analysts following the company, 95% hold a buy rating, according to FactSet. Further, FactSet data shows those analysts have, on average, set a 12-month price target of 212.45 for Amazon stock, according to FactSet. That implies roughly 17% upside from Amazon's mid-day trading price Friday.
Therefore, $1,000 would've bought 55 shares of Amazon at its IPO, but you'd actually have 13,200 shares today with a cost basis of $0.075 per share. Since Amazon trades at $102.24 today, that represents a whopping 136,220% return. In dollar terms, your $1,000 investment would be worth over $1.36 million today.
If I really wanted to impress you with big numbers, I'd point out that a $1,000 Amazon stake on the date of its initial public offering (IPO) in 1997 would have grown to $1.6 million by now.
A 100% return by the end of 2030 translates to a compound annual growth rate of around 11.3%. Amazon's earnings increased by 14% year over year in the fourth quarter of 2023. If the company can keep up this growth rate, its stock has a good shot of doubling or more by 2030.
Amazon's (AMZN 0.75%) 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.
Amazon. Amazon and Apple have the cash and customer appeal to stick around forever. One of the best investments you can make is to buy shares of a financially strong company that makes products millions of people use every day. Amazon (AMZN -3.29%) and Apple (AAPL -1.83%) are two such companies that come first to mind.
Introduction: My name is Rev. Leonie Wyman, I am a colorful, tasty, splendid, fair, witty, gorgeous, splendid person who loves writing and wants to share my knowledge and understanding with you.
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