Amazon.com (AMZN) shed more than $490 billion in market value through the first few months of the year, but then long-term shareholders have been through such painful drawdowns before.
Indeed, truly patient investors in Amazon stock have enjoyed astonishing returns over the decades.
Amazon, which joined the Dow Jones Industrial Average in February 2024, suffered some profoundly sell-offs over the years. At one point during its history, from peak to trough Amazon stock lost over half its value, wiping out more than a trillion dollars in market value.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But, hey, that's just the price of admission to one of the best stocks of all time.
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, was benefitting from the seemingly boundless exuberance over all things AI.
The bottom line on Amazon stock?
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 $105,000. That's good for an annualized total return of 26.2%.
By comparison, the same sum invested in the S&P 500 over the same time frame would theoretically be worth about $6,800 today. That comes to an annualized total return (price change plus dividends) of 10.1%.
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 30.7%. The S&P 500 generated an annualized total return of 10.2% 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, 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 70 analysts issuing opinions on Amazon surveyed by S&P Global Market Intelligence, 47 call it a Strong Buy, 19 say Buy and four have it at Hold.
That works out to a rare consensus recommendation of Strong Buy, and with high conviction to boot. Indeed, Amazon makes the list of analysts' best Dow Jones stocks, as well as the Street's top S&P 500 stocks to buy now.
More Stocks of the Past 20 Years
- If You'd Put $1,000 Into Netflix Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
- If You'd Put $1,000 Into Apple Stock 20 Years Ago, Here's What You'd Have Today
-
I'm 58 and unexpectedly inherited $650K. Does this change my retirement timeline?We asked an expert financial adviser to weigh in.
-
Why Smart Retirees Are Ditching Traditional Financial PlansFinancial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
Why Smart Retirees Are Ditching Traditional Financial Plans
Financial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around YouWhile thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
-
Stock Market Today: S&P 500, Nasdaq Near New HighsThe S&P 500 hasn't hit a new high since February. It's been since December for the Nasdaq.
-
The Bull Case for the Second Half of 2025This strategist sees a volatile market segueing to a strong close this year.
-
7 Essential Investing Rules We All Should KnowThe best time to start investing is right now. That's just one vital rule investors should be familiar with. Here are six more.
-
These Are the Key Tariff Issues to Watch in Coming MonthsWhile they're not dominating headlines right now, tariffs are not over. Some key dates are coming up fast that could upend markets all over again.
-
Technology Unleashes the Power of Year-Round Tax-Loss HarvestingTech advancements have made it possible to continuously monitor and rebalance portfolios, allowing for harvesting losses throughout the year rather than just once a year.
-
The Fiduciary Firewall: An Expert's Five-Step Guide to Honest Financial PlanningArmed with education and awareness, you can avoid unethical people in the financial industry by seeking fee-only fiduciaries and sharing your knowledge with others.
