How much money did you have to invest in Amazon 10 years ago to retire today?

Amazon has come a long way since its humble roots. Amazon was originally founded as an online bookstore, but is now the go-to name for e-commerce, selling everything from ballpoint pens to prefab homes.

Find out: One smart way to grow your retirement savings in 2024
Check it out: 10 valuable stocks that could become the next Apple or Amazon

The company is the fourth largest in the entire S&P 500, with a market capitalization of a whopping $1.812 trillion as of March 18th.

Investors who have held onto stocks through thick and thin, despite occasional volatility, have been rewarded handsomely. But if you had invested solely in Amazon 10 years ago, would you have enough money to retire today? Are you looking ahead to the next 10 years? Read on to learn more about the performance of this great stock.

sponsor: Protect your wealth with a Gold IRA. Take advantage of gold’s timeless appeal with a Gold IRA recommended by Sean Hannity.

How has Amazon stock performed over the past 10 years?

Over the past decade, Amazon stock has been on a roll, returning about 856% to investors. This is almost nine times the initial investment over 10 years. This return far exceeds the return of the S&P 500, which still posted an impressive 174% over the same period.

MORE: Here’s How Much Money You’d Have Now If You Invested $10,000 in GameStop and AMC in 2021

If you invested $100,000 in Amazon 10 years ago, could you retire today?

An investor who wisely chose to invest $100,000 in Amazon 10 years ago would be rewarded handsomely as of today. His $100,000 now amounts to about $856,000, just short of his mythical $1 million that many people aim for as a nest egg. A small bump to $120,000 is enough to push it past $1 million.

How about $50,000? $150,000?

An investor who put away just $50,000 in Amazon stock 10 years ago could still make a huge profit when it comes to saving for retirement. A $50,000 investment would be worth approximately $428,000. The person who was able to siphon off $150,000 would likely be able to live a comfortable retirement since that initial investment is worth her $1,284,000.

story continues

What do analysts predict for Amazon stock from here?

Most analysts don’t make 10-year stock price forecasts because there are too many variables. The 47 Wall Street analysts covering Amazon have a consensus rating of “Strong Buy” on the stock, with an average 12-month price target of $208.48. This represents a 16.6% increase over the March 14 price of $178.75.

Analysts at Coin Price Forecast provide a 2034 forecast for Amazon stock, estimating a 276% price increase over the decade to $672 per share.

Why Amazon may still be a good buy

There are three main reasons why Amazon continues to grow.

The first is the barrier to entry. Anyone can start an online store, but Amazon has the reputation, influence, and logistics to keep an 800-pound gorilla indoors. While many traditional retailers still struggle to attract customers, Amazon offers almost any product to anyone 24/7 from the comfort of their home.

In addition to overall online shopping growth, Amazon will benefit from both its digital advertising and Amazon Web Services divisions. Although the advertising segment is a fairly new area for Amazon and has shown high growth so far, AWS already controls more than a third of its global cloud computing services revenue.

Finally, unlike some tech stocks that have reached stratospheric valuations, Amazon hasn’t historically been very expensive. Currently, Amazon’s sales are around 3.2x, which is about the same as the average for the past 10 years. While it’s certainly not a “cheap” stock, its price-to-earnings ratio of about 61x is still roughly in line with its long-term average valuation.

There are many other reasons why investors continue to buy Amazon. In addition to its AI efforts, the stock recently joined the venerable Dow Jones Industrial Average, making it a true blue-chip stock in the eyes of many investors.

Is it too late to add Amazon stock to your portfolio?

If you believe in Amazon’s long-term growth story, it’s not too late to add it to your portfolio. This is especially true if you are a young investor, as it will take time for your money to grow further.

If Amazon can keep pace with the overall market and maintain a long-term average annual return of 10%, just $175 per month starting at age 25 is enough to earn more than $1.1 million if you retire at age 65. right.

If Amazon manages to generate 16.6% annualized returns over the next 12 months, as analysts predict, that $175 monthly investment will skyrocket to an incredible $9.2 million. Even if he waits until age 35 to start, at a 16.6% annual return, a modest $175 monthly investment could net him more than $1.7 million.

GOBankingRates Details

This article originally appeared on GOBankingRates.com: How much money did you have to invest in Amazon 10 years ago to retire today?