Amazon (NASDAQ: AMZN) is an exceptional business. It has a strong presence in multiple massive, high-growth industries. Its $2.7 trillion market capitalization makes it one of the most valuable companies on Earth.
However, the shares have disappointed investors. They are up 47% in the trailing five-year period (as of Sept. 2), significantly underperforming the S&P 500 index. They also trade 10% below their all-time record, which was established about a month ago in early August.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
This setup looks like a good opportunity for investors to buy a stake in the “Magnificent Seven” stock. Here’s what I predict a $10,000 allocation made at a 10% discount today will be worth in 10 years.
Image source: The Motley Fool.
Massive scale is an inhibiting factor to consider
In the past decade, Amazon’s stock price has climbed 561%. During this time, net sales soared 560%. The top line went from $30.4 billion in second-quarter 2016 to a whopping $200.6 billion in the most recent quarter (ended June 30). This business has been one of the most impressive success stories in history.
Given that it’s a colossal enterprise these days, however, I think it would be silly for investors to expect a similar type of return between now and September 2036. Sell-side analysts hold a consensus view that revenue will reach $828.3 billion in 2026. Amazon passed Walmart last year to hold the title of having the highest sales figure.
I still believe the stock has what it takes to beat the market in the next 10 years. I predict that Amazon shares will rise 300% during that time, turning $10,000 into $40,000.
Amazon’s revenue gains surely aren’t going to exceed 20% annually in the future. After all, it won’t be long until yearly sales start to top a staggering $1 trillion.
However, its focus on operating leverage and taking advantage of its scale will be key. As a result, the most critical driving force for the stock will be earnings growth.
From 2025 to 2028, Amazon’s revenue will increase by 53%, according to consensus expectations. Its diluted earnings per share, on the other hand, are forecast to climb at a much faster rate of 86%. It’s reasonable to think that this trend of the bottom line outpacing sales will hold up in the future.
Investors should also consider the stock’s valuation. It trades at an enterprise value-to-earnings before interest and taxes (EBIT) ratio of 29.2 right now. This is inexpensive from a historical perspective. It’s anyone’s guess what multiple shares will trade at in 10 years. However, the current entry point is intriguing and adds potential upside.
Amazon is a business that belongs in your portfolio
Just because Amazon’s return potential in the coming decade most likely won’t mimic what was achieved in the last 10 years, it doesn’t mean investors should completely disregard the business. This is still an exciting growth story. In fact, Amazon continues to be a very compelling opportunity for those seeking exposure to some powerful technological trends.
The company dominates online shopping, thanks to its expansive ecosystem and well-oiled logistics system. Consumers benefit from a top-notch user experience, low prices, and fast/free shipping. In the U.S., 40% of all e-commerce spending goes through the Amazon marketplace.
Digital advertising has quickly become a major contributor to financial performance. Through the first six months of 2026, the company collected $37 billion in ad sales. This figure rose by 25% compared to the same period last year.
Amazon is able to lean on the popularity of its e-commerce site. Understanding shopper intent, it displays targeted ads that can be monetized.
The most important segment in the coming decade might be Amazon Web Services, which accounted for 21% of the business’s entire revenue base in Q2, while representing 60% of total operating income. Growth accelerated in recent quarters on the back of heightened demand for cloud services and artificial intelligence capabilities.
Investors will want to take advantage of Amazon’s 10% dip and acquire shares today. This is a business that belongs in a long-term portfolio.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.
