Amazon's (AMZN 2.66%) reach stretches wide and deep. If you're like tens of millions of Americans, you rely on it to buy essentials and other items. But even if you aren't, you might be using the websites it powers through Amazon Web Services (AWS) or watching content from its film studios (it owns MGM and operates Amazon Prime Video).
Amazon stock has created incredible shareholder value over the past few years as the company has built itself into the giant it is today. But is it still a massive wealth builder? Let's see if $10,000 invested today can turn into $1 million over the next 10 years.
Growth drivers galore
Amazon has many growing businesses, and it's benefiting from organic tailwinds, as well as making many improvements that have ripple effects across its enterprise.
Amazon accounts for a staggering 40% of all U.S. e-commerce, according to some experts, putting it so far ahead of any competition -- Walmart accounts for about 6% -- that it would be almost impossible for anyone to overtake it in the foreseeable future. That creates a strong moat around its business, and likely why Warren Buffett has the stock in the Berkshire Hathaway portfolio.
E-commerce sales aren't growing at a high rate, but Amazon is constantly upgrading the platform to protect its moat and get its loyal Prime members to become even more reliant on it for their everyday needs and more. It recently switched to a regional fulfillment network to have more products available to ship to customers closer to the final destination, and now it's restructuring its inbound channels to keep products flowing into these eight national distribution centers smoothly. In the 2025 first quarter, it hit a new record for delivery speed and had its highest-ever same- or next-day delivery rates.
What's most exciting to investors today is generative artificial intelligence (AI). Amazon offers a huge assortment of tools and features through AWS to developers and small businesses. These include services like Amazon Bedrock, which gives clients access to a large range of large-language models (LLM) to build their own applications. It also offers tools for developers to build their own, completely custom LLMs, and it has premade applications for small businesses to use generative AI to create marketing campaigns, product descriptions, and more.
The AI opportunity sits in tandem with the opportunity to grow the cloud. AWS is the largest global cloud services provider, and CEO Andy Jassy says that 85% of global information technology (IT) spend is still off the cloud. He sees it as a given that there's going to be a shift over the next 10 to 20 years, and when that shift happens, Amazon has more to gain than almost anyone else. He envisions a future not so far off where generative AI is used in the development of every new application, and Amazon is setting itself up to offer the most comprehensive solutions for developers and remain the cloud provider of choice for its millions of AWS clients.
Image source: Getty Images.
These are Amazon's twin growth engines, but there are more. Advertising is its fastest-growing segment, up 19% year over year in the first quarter, and there are new opportunities in advertising on its ad-supported streaming platform, as well as third-party outlets.
Plus, investors shouldn't underestimate Amazon's ability to identify new growth industries and dominate them, like it's done in the past. It's trying to disrupt physical retail and healthcare, and there may be other businesses on the horizon.
Increasing 10,000%
All that said, can a company as big as Amazon turn $10,000 into $1 million? To phrase it differently, turning $10,000 into $1 million means that the investment grows 100-fold, or by 10,000%. That's a huge feat. Even though Amazon stock has done more than that over its time on the market, it's not likely to do that again, even though it has incredible growth drivers and remains a top stock.
Even over the past 10 years, it's only increased 840%. I say "only" because it's far from 10,000%, as high as it is. As its base gets bigger, and today it's the second-largest company in the world by sales behind Walmart, growth rates have been slowing down, and stock increases will reflect that.
I could explain different scenarios, but it's simple. Just one example is that if Amazon stock were to even increase 10-fold, its market cap would surpass $21 trillion. Keeping its price-to-sales ratio constant, its sales would reach $6.5 trillion, implying a compound annual growth rate of 26%, much higher than recent rates, and next to impossible.
Amazon is still a highly recommended stock to buy, offering growth prospects for shareholders, but it isn't likely to deliver the high returns of young growth stocks.
