In addition to online shopping, the dominant business rides streaming, digital advertising, cloud computing and AI waves.
Stocks in the past crushed the market, but the current valuation is still reasonable.
Despite the company's already large scale, investors should still be able to achieve reliable returns.
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As of the afternoon of May 15, S&P 500 index Return to active territory in 2025. The benchmarks that have attracted attention lasted for a year under pressure from trade uncertainty. But it has roared since early April, showing enthusiasm for improving investors.
Some companies still have a long way to go to make up for all losses. Stocks of a dominant technology-driven company have soared 850% over the past decade, although their current trading is below its record-breaking height by 15%. This is an opportunity.
That's why this monster stock is now a wise buy and is about to hold for the next five years.
There is no doubt that investors have heard of the e-commerce royal family Amazon (NASDAQ: AMZN). Retail leaders have attracted nearly 40% of online spending in the U.S., thus profiting from the ongoing growth in e-commerce shopping. The recent tariff suspension should increase confidence for Amazon merchants and their shoppers.
The company's online marketplace had 2.6 billion visitors in April. This is a lot of attention that is now being monetized by business. In the first quarter, Amazon received $13.9 billion in advertising revenue. The event may be overlooked by other parts of the company, but it quickly became a more important financial driver.
Digital advertising will certainly generate high profits, which can improve Amazon's profitability over time. It is also worth pointing out that letter and Meta Platform Bigger market share In the digital advertising industry.
Amazon Prime Video, with over 200 million subscribers, is a leading streaming service. The ongoing rope trend has prompted consumers to enter solutions that support the internet.
It doesn't seem to be the case, but we're still in the early stages of the company, shifting its spending from local to cloud. Amazon CEO Andy Jassy estimates that so far, only 15% of people have moved to the cloud. With Amazon Web Services (AWS), the company has an industry-leading cloud computing platform that just earned an operating margin of 39.5% in Q1.
AWS will naturally make the business a leader in artificial intelligence (AI). Amazon is developing its own graphics processing unit. However, AWS has a wide range of products and services that enable its customers to better leverage the power of AI in their operations.
Any business will be lucky enough to wield a powerful secular trend. With e-commerce, digital advertising, streaming entertainment, cloud computing, and AI, Amazon is in an unrivalled position to figure out how to drive lasting growth in the long run.
There are certainly not many stocks that are close to Amazon's performance. In just the past two decades, stocks have grown by 12.010%. However, since stock trading is below its peak, investors can Price to sales ratio 3.4. This fits the average of the past five years, and I think it's a good deal.
With trailing 12-month net sales of $650 billion and a market cap of $2.2 trillion, investors might be worried that Amazon lacks potential to produce an adequate return going forward. However, the stock still performs well for investors.
According to estimates by Wall Street Consensus analysts, the company is expected to increase revenue and earnings per share at a compounded rate of 9.4% and 17.5%. Given the strong growth trend outlined above, it is reasonable to believe that the company can drive sustainable financial gains over the long term. This allows Amazon to buy and hold for five years now.
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John Mackey, former CEO of Amazon's subsidiary Whole Foods Market, is a member of the board of directors of Motley Fool. Alphabet executive Suzanne Frey is a member of the board of directors of Motley Fool. Randi Zuckerberg is a sister of former marketing development director, Facebook spokesperson, and Meta Platform CEO Mark Zuckerberg, and a member of the Motley Fools’ board of directors. Neil Patel has no position in any of the stocks mentioned. Motley fool has a place and recommends letters, Amazon and meta platforms. Motley Fool has a disclosure policy.
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