Could Amazon help you become a millionaire by 2032?

Don't look for a repeat performance from the stock's past 20 years, but that doesn't prevent it from being a high-octane holding for the next 10 years.

| More on:
A young woman sitting atop a superyacht spreads her arms in joy, indictaing a share price rise for marine companies

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

There's no denying that Amazon (NASDAQ: AMZN) has been one of the market's more rewarding stocks in recent years. Up more than 20,000% since the end of the year 2000, the e-commerce giant has arguably been the market's best large-cap performer for the timeframe in question. It would be easy to be excited about owning it now.

However, past performance is no guarantee of future results. While many investors have high hopes for Amazon stock over the next 10 years, there's no assurance that the world is due a repeat performance. Serious competition is starting to take shape, and the company is closer to market saturation than it was a couple of decades ago.

Still, there are positive signs. While another quintuple-digit surge may not be in the cards, a triple-digit advance by 2032 is hardly out of the question.

It's not the Amazon you know

While the company started as an online book company back in 1995, it didn't take long for Amazon.com to become an "everything store," selling pretty much anything anyone might want to buy when they want to buy it. Counting all of its third-party sellers' inventories, BigCommerce says the company offers at least 350 million products at any given time. No wonder it's seen as the first place many consumers visit to make an online purchase!

In light of its existing reach, there's no reason to think it won't continue growing. BigCommerce adds that nearly 200 million people shop with Amazon every month. Still, there are nearly 8 billion people on the planet, most of whom are not yet regular Amazon customers.

The problem is that the company's consumer-facing online retailing business isn't exactly what you'd call wildly profitable. Here's another interesting fact: It doesn't matter. The graphic below is telling, visually comparing Amazon's operating income for its North American e-commerce arm, its international e-commerce unit, and its cloud computing division Amazon Web Services (AWS).

While at one time the company's online shopping operation carried all the profit weight, since 2018 its cloud computing service's bottom line has been just as important as its North American retailing business. Indeed, since 2019, AWS has been the biggest moneymaker by far, doing more for the bottom line than North America's and its overseas e-commerce efforts combined.

Amazon's cloud computing arm AWS is significantly more profitable than its e-commerce efforts.

 

Data source: Amazon Inc. Chart by author. All dollar figures are in millions.

As it turns out, the company's customer acquisition and online shopping expansion is proving very expensive, with inflation only making matters worse. As was already noted, though, it just doesn't matter. Amazon Web Services has become such a monster of a business that it can keep the rest of the company afloat while nascent CEO Andy Jassy works on reshaping the online shopping marketplace into something sustainable.

More of the same profit growth on the way

Yet, Amazon Web Services has only scratched the surface of its potential. Numbers from technology market research outfit Technavio puts things in perspective. Its outlook suggests the worldwide cloud computing industry will grow at an annualized pace of 17% through 2025, ending that period $287 billion bigger than when it started.

Notably, Technavio believes North America alone -- where Amazon has concentrated its cloud computing efforts -- will account for 40% of this growth for a business that's already a major profit engine for the company.

And that's still not all of Amazon's noteworthy growth opportunities outside of conventional e-commerce. While the company has been mostly guarded about providing details of the young business, last year's full-year report confirmed it generated $31.2 billion worth of advertising revenue, monetizing all the traffic its shopping site draws by helping third-party sellers and advertisers steer people to particular products.

While 2021 was a banner year in terms of growth, eMarketer is still calling for at least two more years of double-digit increases for the company's ad business. For perspective, Alphabet's (NASDAQ: GOOGL) (NASDAQ: GOOG) Google generated $43.3 billion worth of search-based advertising sales last year. Bear in mind that this is also high-margin revenue as Amazon is only monetizing a website and traffic it already had, tacking on incremental business.

Millionaire-maker alert

Bottom line? Yes, Amazon is still one of those stocks that could help your portfolio reach the million-dollar mark. But the same investing advice that applied before still applies now, of course. Namely, keep your portfolio diversified and keep your expectations in check.

It's unlikely that Amazon shares will see massive gains again over the coming 10 years since the bulk of the 20,000% return it dished out since the year 2000 was rooted in the fact that Amazon's growth was so unexpected. Investors see it coming now, but they didn't then.

Nevertheless, Amazon certainly has the potential to double or even triple in value throughout the coming decade. The key is simply leaving it alone for that long and letting the stock do its thing.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. The Motley Fool owns and recommends Alphabet (A shares), Amazon, and BigCommerce Holdings, Inc. The Motley Fool recommends Alphabet (C shares). The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Should you invest $1,000 in Allkem right now?

Before you buy Allkem shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Allkem wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

James Brumley owns Alphabet (A shares). John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), Amazon, and BigCommerce Holdings, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Prediction: This artificial intelligence (AI) stock will be worth $5 trillion in 3 years

Let's take a closer look at the catalysts that could propel this stock toward that valuation.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
International Stock News

This Artificial Intelligence (AI) chipmaker just got a game-changing boost from Amazon, and Nvidia investors should be paying close attention

Amazon just made a notable investment in Nvidia's top rival.

Read more »

Happy man working on his laptop.
International Stock News

A once-in-a-decade opportunity: Here's why I'm buying Alphabet stock like there's no tomorrow

Alphabet's stock rarely gets this cheap, and right now could be a once-in-a-decade opportunity to scoop up shares at a…

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
International Stock News

Is Warren Buffett's Berkshire Hathaway the smartest investment you can make today?

So, with all the uncertainty, is Berkshire Hathaway the smartest investment you can make today?

Read more »

Warren Buffet
International Stock News

7 ways Warren Buffett changed my investing approach

I'm a big fan of Warren Buffett, and have been for many years.

Read more »

iPhone with the logo and the word Google spelt multiple times in the background.
International Stock News

Down 12% this year, should you buy Alphabet stock?

The Google owner is underperforming the Nasdaq Composite, which has rallied in recent weeks.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

Missed out on Apple in 2012? Buying Nvidia stock today could be your second chance

By now, it's clear that artificial intelligence (AI) is the next major technology platform.

Read more »

Robot humanoid using artificial intelligence on a laptop.
International Stock News

3 reasons Amazon stock looks like an incredible bargain right now

Here are three reasons Amazon stock looks like a rare bargain at current levels.

Read more »