Amazon.com (AMZN) is having a terrific 2024, or exactly the sort of performance long-time shareholders have come to expect.
Indeed, truly patient investors in Amazon stock have enjoyed market-crushing returns.
Amazon, which joined the Dow Jones Industrial Average in February, suffered some profoundly painful drawdowns over the past three years. From peak to trough, Amazon stock lost over half its value, wiping out more than a trillion dollars in market value at one point in the process.
Amazon, which began life as a modest website for book buyers, went public in 1997, and has since generated truly outsized wealth for shareholders. An analysis by Hendrik Bessembinder, finance professor at the W.P. Carey School of Business at Arizona State University, found that Amazon was one of the 30 best stocks in the world over three decades.
Between its initial public offering in 1997 and December 2020, Amazon stock created nearly $1.6 trillion in wealth for shareholders, according to Bessembinder's model, which includes cash flows in and out of the business and other adjustments.
Amazon's emergence as the nation's largest e-commerce company is only part of the story behind its extraordinary wealth creation. The firm is a giant in cloud-based services and artificial intelligence (AI), and a leader in streaming media and digital advertising.
Amazon has a massive footprint in the analog world too. It owns the Whole Foods grocery store chain and maintains sprawling logistics operations. The latter comprise a vast assemblage of distribution centers and fleets of commercial aircraft and trucks, among other capital intensive assets.
But let's face it: Amazon, like most of the other Magnificent 7 stocks these days, is benefitting from the seemingly boundless exuberance over all things AI.
The bottom line on Amazon stock?
(Image credit: YCharts)
Which brings us to what $1,000 invested in Amazon stock 20 years ago would be worth today.
As you can see in the above chart, if you had invested $1,000 in Amazon stock a couple of decades ago, it would today be worth about $96,000. That's good for an annualized total return of 25.6%.
By comparison, the same sum invested in the S&P 500 over the same time frame would theoretically be worth about $7,400 today. That comes to an annualized total return (price change plus dividends) of 10.5%.
If past is anything like prologue, Amazon will continue to outperform the broader market at a healthy clip. For its entire history as a publicly traded company, Amazon stock generated an annualized total return of 32.2%. The S&P 500 generated an annualized total return of 10.5% over the same span.
Put another way, Amazon stock has more than tripled the performance of the broader market since it went public. The way things are going so far in 2024, bulls are probably feeling pretty confident about Amazon keeping its streak alive.
Wall Street sure thinks it can – at least over the next 12 months or so. Of the 61 analysts issuing opinions on Amazon surveyed by S&P Global Market Intelligence, 44 call it a Strong Buy, 15 say Buy and two have it at Hold.
That works out to a rare consensus recommendation of Strong Buy, and with high conviction to boot.Indeed, Amazon has the highest rating of all Dow Jones stocks.
Over the last decade, Amazon's shares have appreciated 945%. That easily bested the S&P 500's 227% total return. Even starting with a relatively small $1,000 just 10 years ago, you would now have about $10,500.
After several stock splits, an investment of $1,000 in Amazon's IPO back in 1997 would now be worth around $2.5 million (as of July 1; at a share price of $197.2). As this chart shows, the share price has risen year-on-year.
By 2025, things could start looking up for Amazon again. The stock is expected to recover and reach $239.73, which would mark a 28.45% increase from its current price.
Of the 64 Amazon stock analysts following the company, 95% have a buy rating, according to FactSet. The average target price for Amazon stock by analysts is 220.16, according to FactSet, implying roughly 26% upside from Amazon's opening price on Sept.
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.
Currently, Amazon.com has a market capitalization of $1.74 trillion. Buying $100 In AMZN: If an investor had bought $100 of AMZN stock 10 years ago, it would be worth $1,038.46 today based on a price of $166.10 for AMZN at the time of writing.
Of the 47 analysts who recommended Amazon in June, 44 rated it a buy or a strong buy. Forecasters predict that Amazon will reach $200 per share a year from now and will continue to rise to $250 per share at the end of 2026. In 2027, the prediction is for a price of $300, and $250 by the end of 2028.
Summary. Amazon's future growth potential is often underestimated due to its size, but its unique position in leading growth industries sets it apart. Amazon's online store, 3P sales, advertising, subscriptions, and AWS segments all contribute to its potential $4 trillion valuation by 2030.
The latest closing stock price for Amazon as of September 09, 2024 is 175.40. The all-time high Amazon stock closing price was 200.00 on July 02, 2024.
Monday marked the 20-year anniversary of Google's IPO. The stock has appreciated over 6,500% since then. In other words, if you invested $1,000 in Google at its closing price on Aug. 19, 2004, your shares of Alphabet, now the search giant's parent, would have been worth $66,521.70 as of Monday's close.
Based on 43 Wall Street analysts offering 12 month price targets for Amazon in the last 3 months. The average price target is $222.88 with a high forecast of $265.00 and a low forecast of $186.00. The average price target represents a 30.04% change from the last price of $171.39.
Ten Year Stock Price Total Return for Amazon.com is calculated as follows: Last Close Price [ 171.39 ] / Adj Prior Close Price [ 17.12 ] (-) 1 (=) Total Return [ 901.3% ] Prior price dividend adjustment factor is 1.00.
If you had invested $10,000 in Amazon at its IPO price in 1997, you would have purchased 555 shares, not including commission expenses or fractional shares. Taking into account Amazon's four stock splits, these 555 shares would have multiplied into 133,200 shares, as of today.
The company's stock traded around $2 per share 20 years ago. If you had invested $1,000, you could have bought 500 shares of Amazon stock. Shares are currently trading at $187.88, meaning your investment's value could have soared to $93,940.
Introduction: My name is Eusebia Nader, I am a encouraging, brainy, lively, nice, famous, healthy, clever person who loves writing and wants to share my knowledge and understanding with you.
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