For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to 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 $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
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Amazon ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in November 2014 would be worth $12,025.43, or a 1,102.54% gain, as of November 26, 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 189.66% and gold's return of 110.14% over the same time frame.
Analysts are forecasting more upside for AMZN too.
Amazon’s third-quarter results were driven by Prime and AWS momentum. We expect 2024 net sales to increase 10.7% from 2023. 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. Amazon’s expanding global presence remains a positive. Growing capabilities in grocery, pharmacy, healthcare and autonomous driving are other positives. Deepening focus on generative AI is a major plus. The company issued positive Q4 2024 guidance fueling investor enthusiasm. However, macroeconomic challenges remain headwinds. Rising transportation and fulfillment center costs are concerns.
The stock has jumped 6.93% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 16 higher, for fiscal 2024; the consensus estimate has moved up as well.5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
