Imagine investing $1,000 in a stock that seems to have a lot of promise. You watch the stock move higher, then lower, then higher again. However, you remain steadfast throughout the volatility and hang on for the ride. Twenty-eight years go by. You look at your brokerage account to find that your initial $1,000 investment is now worth nearly $2.25 million.
This isn't a pie-in-the-sky scenario. Anyone who bought $1,000 worth of Amazon's (AMZN 1.62%) shares at its initial public offering on May 15, 1997, and never sold would indeed be a multimillionaire today. This stock has increased by a staggering 225,000% -- and it's still a screaming buy.
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Amazon's path to gigantic returns
To say that Amazon has taken investors on a rollercoaster ride is an understatement. The stock delivered a gain of more than 2,600% in its first 19 months on the market. By the end of 1999, Amazon was up nearly 3,800%.
The good times didn't last. Between late 1999 and late 2001, Amazon lost roughly 90% of its market cap as the dot-com bubble burst. However, the company had already planted the seeds of its future success by expanding beyond books into DVDs, music, gift items, home improvement products, software, and video games. During the first few years of the 21st century, Amazon added more products to its e-commerce platform.
Amazon's share price steadily rebounded, too. The company had one of its most pivotal years ever in 2006 with its launch of Amazon Web Services (AWS). It didn't take long for AWS to become Amazon's biggest growth engine.
The stock's spectacular gains following the market meltdown in 2008 and 2009 were largely due to AWS' explosive growth. Amazon's e-commerce business also enjoyed a major surge due to the COVID-19 pandemic.
Where Amazon is today
Today, Amazon sells nearly everything online (including cars, through its partnership with Hyundai). The company is the undisputed 800-pound gorilla of e-commerce with a U.S. market share of 37.6%. Its nearest rival, Walmart, has a market share of only 6.4%.
AWS also dominates the cloud services market. In the first quarter of 2025, Amazon's cloud unit claimed a market share of 29%. Microsoft held the No. 2 spot, with a market share of 22%. Granted, AWS is growing more slowly than some of its rivals these days. However, it's still delivering strong growth, with revenue jumping 17% year over year in Q1.
Amazon is arguably focusing more on its bottom line than ever before. Its profits soared 64% year over year in Q1 to $17.1 billion. Technology, especially the use of artificial intelligence (AI) and robotics, is helping the company boost its profitability.
As it has in the past, Amazon also continues to move into new markets. It expanded into healthcare with the launch of Amazon Pharmacy in 2020 and the acquisition of primary care chain One Medical in 2023. Amazon plans to begin offering a satellite internet service later this year once all of its Project Kuiper satellites are in orbit.
Why this stock is still a screaming buy
Sure, Amazon's share price is basically flat so far in 2025. However, I think the stock is still a screaming buy for three key reasons.
First, AI presents a massive growth opportunity for AWS. Despite impressive advances, we're still only in the early innings of the AI transformation. In particular, agentic AI could spur tremendous growth in demand for AWS. I also expect Amazon's internal use of AI will continue to drive higher profitability.
Second, Amazon's e-commerce growth story isn't over. CEO Andy Jassy correctly noted in the company's October 2024 earnings call that Amazon has only around 1% of the global retail market. He predicted that much of the retail business currently conducted in physical stores will move online over the next 10 to 20 years. I suspect that he's right.
Third, a statement that Amazon founder Jeff Bezos made years ago is still true: "Your margin is my opportunity." I predict that Amazon will continue to disrupt other markets thanks to its innovation and scale of operations.
Will Amazon deliver a 228,000% return over the next 28 years? Probably not. However, I think this stock will make patient investors a lot of money.
