Prediction: Amazon Could Turn a $10K Investment Into This by 2030

I've owned shares of Amazon (NASDAQ: AMZN) over the years and added to my position earlier this year after the valuation of the cloud computing and e-commerce leader plummeted.

It just seemed too good an opportunity to pass up, with its price-to-earnings ratio dropping into the mid-20s. On top of that, it seemed that its huge investments in AI, which scared some investors away, would pay off. The record $220 billion in capital expenditures was not made in anticipation of higher demand for AI cloud computing; it was required to meet the demand that was already there.

Image source: Amazon.

That started to show in the second-quarter earnings report, as Amazon saw revenue grow 20%, its fastest growth in more than four years. That was boosted by 37% revenue growth in Amazon Web Services (AWS), its fastest growth in 18 quarters.

And this growth spurt doesn't appear to be slowing, as Amazon has an overflowing pipeline. The company has a backlog of $496 billion in AWS contracts that haven't been executed yet, up from $364 billion after Q1 and $244 billion at the start of 2026.

So, it looked like a good buy to me earlier this year, and it might be an even better buy now.

Buy the dip

Despite its surging revenue and huge backlog, Amazon's stock is cheaper now than it was at the start of the year.

It is trading at just 20 times earnings and 23 times forward earnings. That is the lowest P/E ratio for Amazon, other than a dip to 19 in June, that Amazon stock has seen in at least a decade.

Shares are up 11% year to date, but they have dropped since peaking at an all-time high of $284 per share following the second-quarter earnings run-up. Since then, the price has dropped about 10% to around $256 per share.

That next day, Amazon founder and executive chairman Jeff Bezos sold about 15 million shares, or $4 billion worth of Amazon stock, taking profits after the all-time high. That accounted for some of the pullback. There have also been concerns about its negative free cash flow. On the Q2 call, CEO Andy Jassy said the capital spending will cause free cash flow headwinds until the data centers come online.

Also, the Federal Trade Commission (FTC) and 22 states filed a lawsuit against Amazon in late August over alleged unfair digital ad charges, which weighed on the stock.

Over the past five years, Amazon's stock has averaged a modest 10% annualized return. But five years ago, it was trading at 64 times earnings. Now, Amazon is trading at a near-decade-low valuation, with a huge and growing backlog and plans to build out the infrastructure to support it.

It's hard to predict what will happen, but it appears to be in a better position than most other "Magnificent Seven" stocks to grow over the next five years. Even a 15% annualized return over the next five years would turn a $10,000 investment into about $30,000, with $100 contributed every month.

Dave Kovaleski has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.