Since the start of the new millennium, many major events have derailed markets and the economy. Investors can point to the dot-com bubble, the housing meltdown and Great Recession, the coronavirus pandemic, and decades-high inflation. But in the past 20 years, the Nasdaq Composite Index has risen 703%. 

Some businesses fared much better. One of the best performing stocks has been none other than Amazon (AMZN 1.36%). A $1,000 investment in this FAANG stock 20 years ago in July 2003 would be worth an astonishing $69,430 today, good for a monster return of 6,840%. You'd struggle to find a better performer during that period. 

But past results don't guarantee future returns. So, is Amazon a good stock to buy right now? Let's look at where this business has been and where it might be going. 

Amazon is a transformational enterprise 

To say that Amazon has changed a lot in the last two decades might be an understatement. The company was spawned in the mid-1990s, starting as an online seller of books, then CDs and DVDs. In 1997, the year Amazon had its initial public offering, it generated revenue of just $148 million, a tiny amount in hindsight. 

Over the next two-plus decades, the business transformed into a powerhouse, allowed third-party sellers onto its marketplace, launched Amazon Web Services, and introduced Amazon Prime. Amazon also made multiple acquisitions, including Zappos, Twitch, and Whole Foods. Amazon has other brick-and-mortar concepts, including Amazon Fresh grocery stores and the cashier-less Amazon Go stores. 

Today, Amazon is a dominant player in the markets it has a presence in. It commands 40% of all e-commerce spending in the U.S. AWS generates 32% of the revenue in the global cloud computing market. And digital advertising, a relatively new revenue driver for Amazon, saw sales jump 23% in the first quarter of 2023 to $9.5 billion.  

Last year, Amazon's overall net revenue totaled $514 billion, 347,000% higher than that 1997 figure. What a tremendous success story. Long-time shareholders would agree. 

Temporary issues 

Amazon's business was thriving during the worst of the pandemic, as online shopping really took off. But like many internet companies, demand dried up as consumer behavior normalized when economies opened back up. Add in high inflation and rising interest rates in 2022, and Amazon has been facing some headwinds. 

Revenue in 2022 only increased 9% year over year, a sharp slowdown from prior years. And during the first three months of this year, net sales rose just 9% again. Investors aren't accustomed to these single-digit gains. 

Because management had overinvested in the company's fulfillment capabilities, expecting pandemic-driven demand would continue, they were forced to cut costs drastically, exemplified by the announced layoffs of 27,000 employees since late last year. 

I think these issues will be temporary, as Amazon is well-positioned to continue its strong growth as we look ahead. Online shopping, cloud computing, and digital advertising, which are Amazon's big revenue engines, all benefit from major secular tailwinds. The current macro backdrop might worry some investors, but I'm confident Amazon will be able to successfully navigate any turmoil that comes its way. After all, it managed to not only survive but thrive through all the adverse events over the last 20 years mentioned above. 

With the stock trading at a price-to-sales multiple of 2.6, which is much cheaper than the 10-year trailing average of 3.1, investors would be smart to consider buying Amazon today.